The U.S. Fish and Wildlife Service listed the lesser prairie chicken as a threatened species.

The Lesser prairie-chicken (Tympanuchus pallidicinctus) is a medium sized, grayish-brown grouse  found in five U.S. states, Colorado , Kansas , New Mexico , Oklahoma  and Texas. The move by the Obama administration is expected to draw criticism from oil companies located in the state.

The species is now categorized as threatened under the Endangered Species Act (ESA). A special rule under section 4(d) of the ESA will limit regulatory impacts on businesses and landowners due to the current endangered status of the bird, FWS said in a news release.

The lesser prairie chicken's range has reduced by 84 percent in the past few years. Habitat loss and drought in the southern Great Plains are cited as main reasons for the decline in the bird numbers. Last year, the range-wide population was around 17,616 birds, which was a 50 percent decline from bird numbers estimated in 2012. Conservationists want to increase the population to 67,000 birds range-wide, FWS said.

"The lesser prairie-chicken is in dire straits," said U.S. Fish and Wildlife Service Director Dan Ashe. "Our determination that it warrants listing as a threatened species with a special rule acknowledges the unprecedented partnership efforts and leadership of the five range states for management of the species."

"Working through the WAFWA (Western Association of Fish and Wildlife Agencies' range-wide conservation plan, the states remain in the driver's seat for managing the species - more than has ever been done before - and participating landowners and developers are not impacted with additional regulatory requirements," Ashe added.

The threatened status for the Lesser Prairie chicken is seen as bad news for energy companies. Oil companies could lose hundreds of thousands of dollars invested in projects at The Permian Basin in Texas and New Mexico, Associated Press reported. The move could also affect development of wind farms in the region.