A layoff and reconfiguration is sweeping M3 Midstream, which after 11 years in operation is closing its Durango offices because of a crippling downturn in the oil and gas industry.
M3 Midstream, which provides services to natural gas producers, announced last week plans to consolidate operations to the company’s headquarters in Houston.
As a result, about one-third of the 49 people employed at the Durango office (also known as Momentum Energy) at 1099 Main Ave. will relocate to Houston, one-third will continue their duties through the end of May to assist with the transition, and one-third have been terminated, company officials confirmed.
“Our Durango office is staffed with a close-knit team of talented and hardworking individuals,” said Laranne Breagy, senior vice president and general counsel for M3, in a prepared statement.
“Decisions such as this are among the most difficult any company must make. Yet we are facing the reality of a long-term retrenchment in our industry from which we are not insulated.”
Breagy said the company is using “all available measures to smooth the transition for affected employees.”
The oil and gas industry has been hit hard in recent months by falling prices.
In December, an annual study conducted by the University of Colorado Boulder Leeds School of Business that includes statewide forecasts and trends for 13 business sectors, said the industry slump means a lot of uncertainty.
Last year, Colorado lost an estimated 6,000 jobs in the industry, and the severance taxes that many local governments rely on are down as well.
The price of oil dropped below $50 per barrel, the study said, and there was a “remarkable drop” of around 50 percent in oil prices in 2015 compared with 2014. The state is looking at a 35 percent decline in gross value over 2014, which also impacts revenue for local governments.
Specifically for natural gas – a key economic driver for La Plata County – it is estimated that Colorado will see the value fall more than 35 percent from 2014, the study said.
