Oil scene in Wyoming's Powder River Basin shows signs of revival

New York

A YEAR ago, it cost the family-owned Kirkwood Oil & Gas LLC a relative pittance to secure drilling rights in the Powder River Basin, the lonely, scrubby corner of north-east Wyoming known mostly as a home to cattle ranches and coal mines. Today, it's a different story.

Drilling permits on federal land that went for less than US$1,000 an acre (0.4 hectare) now fetch as much as US$17,000, and the region has become one of the hottest prospects for new US supply. Kirkwood has a lot more competition amid the sagebrush and rolling hills, including private-equity firms from Houston and big explorers such as Chesapeake Energy Corp and EOG Resources Inc.