Oct. 11--FARMINGTON -- Hampered by low natural gas prices and expecting a continued slowdown in drilling with the onset of winter, local oil and gas companies are making major cutbacks.

Officials with the Bureau of Land Management and with National Forest lands in the San Juan Basin are preparing to implement annual wildlife protection restrictions, which between Nov. 1 and March 1 limit the use of drilling and service rigs on federal lands.

Gas production companies typically plan to adjust winter drilling activities to accommodate the land restrictions. But alternate well sites can be mediocre, a risk that has encouraged some producers to abandon the winter projects this year and require fewer contractor services, Aztec Well Servicing Vice President Jason Sandel said.

Aztec Well Servicing companies this week proposed early retirement buyouts for as many as 20 veteran employees in an attempt to avoid future job cuts.

"We're faced with our business operating at about 15 percent of capacity over the next six months. Obviously further job cuts are a potential," Sandel said. "Rather than just leaving things to chance, we wanted to go in and see if there was a way we could take care of some of those long-term employees."

Employees older than 62 were offered $1,000 in severance for each year of employment with the Aztec Well companies, which include Triple S Trucking, Totah Rental and Equipment, Double M and Roadrunner. Accepting the buyout is optional and is available to eligible workers through Nov. 30.

"As our work continues to dry up or continues to go away, difficult changes are having to be made each and every day," Sandel said.

Since October 2008, the Aztec Well companies have reduced work force by more than 54 percent, now employing just 375 of the 825 who had jobs a year earlier, Sandel said.

Tom Mullins, president of the Independent Petroleum Association of New Mexico, agreed the seasonal downturn combined with the weak gas prices could generate above-average losses for idle service companies.

"The service sector is very dependent upon new investments," Mullins said. "When the prices were higher you could drill (alternate sites). Now with the prices being low, people are going to just stop drilling."

The seasonal regulation, established to protect deer and elk herds, will further the oil and gas industry's slowdown, according to New Mexico Oil and Gas President Bob Gallagher.

"Any time you are prohibited from, or have specific areas that you can't go into at certain times, it absolutely contributes to the downturn of the industry," he said.