Wyoming vs. Colorado: Permits, Productivity, and Potential

Wyoming’s oil‑and‑gas operators hold three times as many active drilling permits as their peers in Colorado—yet they drill far fewer wells. At a recent Wyoming Oil and Gas Conservation Commission roundtable, Three Crown Petroleum presented numbers showing the state has 8,617 permits versus Colorado’s 2,806, but converts only 59% of them into drilled wells, compared with 91% in Colorado and 80% in North Dakota (source). In 2025, Wyoming drilled 346 wells, while Colorado drilled 729 and North Dakota 909, resulting in Wyoming pumping about 290,000 barrels per day versus Colorado’s 480,000 barrels and North Dakota’s 1.17 million (source). This disparity prompted a frank discussion about Wyoming’s “8M rule,” which lets other operators take over idle permits after two years; only about 100 of 8,000 permits currently face challenges, and participants suggested tightening the renewal process to spur drilling (source).

Key takeaways and opportunities

• Abundant permits ≠ production: 

  • Wyoming’s large inventory of permits signals enormous resource potential, but only disciplined projects convert them to wells. More active management of expiring permits and 8M challenges could unlock idle acreage.

• Favourable business climate: 

  • Wyoming’s low permit fees, absence of state income tax, and competitive severance taxes make it a cost‑effective entry point for new operators. A recent federal decision to delay implementation of higher bonding requirements gives small operators “breathing room” by allowing more time to meet bond increases (source).

• Colorado’s productivity advantage: 

  • With a higher conversion rate and strong production base, Colorado offers immediate cash flow potential; however, higher permit costs and regulatory complexity demand careful budgeting.

• Investment in infrastructure: 

  • Both states need efficient logistics to translate permits into barrels. Our sourcing and logistics solutions ensure camps, equipment, and supplies reach remote counties—such as Campbell, Converse, and Johnson in Wyoming—on schedule and budget, supporting continuous drilling.

• Workforce housing matters: 

  • Remote projects require comfortable, compliant accommodations. A two‑year permit window in Wyoming means operators often delay drilling while lining up infrastructure; partnering with a provider that can mobilize camps quickly reduces risk and accelerates the schedule.

Why the gap? Costs, policy, and certainty

Howard Cooper of Three Crown Petroleum argued that Wyoming offers one of the most favorable business environments in the nation: a drilling permit costs about $500 versus $150,000 in Colorado, the state has no income tax and competitive severance and ad valorem rates (source). Yet the existing two‑year permit renewal process can allow operators to hold permits indefinitely. The 8M rule was designed to prevent hoarding—another company can file an application to challenge a renewal and take over drilling rights—but it is seldom used. Attendees at the roundtable floated ideas like shortening renewals to six months and reducing ad valorem and severance taxes in a well’s first year to encourage drilling (source).

Regulators emphasized that certainty matters. The Commission’s supervisor, Tom Kropatsch, said operators appreciate the two‑year timeframe because it lets them navigate lengthy federal permitting processes and assemble larger acreage positions (source). Wyoming officials promised to consider feedback but no immediate rule changes are planned (source). The Petroleum Association of Wyoming noted that state agencies’ willingness to review rules and take industry input is one reason operators view Wyoming as attractive (source). Nonetheless, Wyoming’s production has flatlined since 2019 despite sitting on 978 million barrels of proven oil reserves and 15 trillion cubic feet of gas (source). The untapped potential is huge.

Colorado, meanwhile, may issue fewer permits but makes more out of them. It drilled twice as many wells in 2025 and produces 475,000 barrels per day according to the U.S. Energy Information Administration (source). Colorado ranked as the fourth‑largest oil‑producing state in 2024, accounting for about 4% of U.S. crude output (source). The state’s more stringent permit requirements and higher fees increase costs but also ensure that projects move ahead quickly once approved. For companies seeking steady production and established infrastructure, Colorado remains a mature market, even as regulatory uncertainty around drilling remains a concern.

Permits, wells and production: a snapshot

State	Active permits & conversion rate	2025 wells drilled & daily production
Wyoming	8,617 active permits, ~59% converted to wells	346 wells drilled in 2025; ~290 kb/d production
Colorado	2,806 permits, ~91% conversion	729 wells drilled; 475 kb/d production
North Dakota	1,359 permits, ~80% conversion	909 wells drilled; ~1.17 mb/d production

(kb/d = thousand barrels per day; mb/d = million barrels per day.)

Why invest in Wyoming and Colorado?

Taken together, these insights reveal complementary strengths. Wyoming is an under‑developed basin with low costs and a regulatory framework open to improvement; it offers upside for adventurous operators willing to challenge idle permits and invest in logistics and housing. Colorado provides scale and reliability, with proven reserves and established infrastructure, albeit at higher entry costs. For companies seeking diversification, pursuing opportunities in both states hedges risk: Colorado can deliver near‑term returns while Wyoming offers longer‑term growth as reforms unlock more permits.

As a Colorado‑based partner with national reach, Karavan Trade Partners is uniquely positioned to support drilling campaigns in both states. We handle sourcing and logistics to deliver furnishings and supplies to remote sites, and we manage the transport of heavy equipment across challenging terrain. Whether you’re looking to capitalize on Wyoming’s untapped potential or expand in Colorado’s productive fields, we provide the infrastructure needed to keep crews comfortable, safe, and productive—so you can focus on drilling and delivering energy.