Global energy demands continue to result in new and emerging sources of anthropogenic disturbance to populations and systems. Here, we assessed the influence of natural gas development on a critical component of fitness (nest survival) for Brewer’s sparrow (Spizella breweri), sagebrush sparrow (Artemisiospiza nevadensis), and sage thrasher (Oreoscoptes montanus), three species of sagebrush-obligate songbirds that are of conservation concern, and assessed the efficacy of a commonly used index of oil and gas development intensity (well density) for estimating habitat transformation and predicting species’ responses. During 2008–2009 and 2011–2012 we monitored 926 nests within two natural gas fields in western Wyoming, USA. We calculated landscape metrics (habitat loss, amount of edge, patch shape complexity, and mean patch size) to identify the aspect of landscape transformation most captured by well density. Well density was most positively associated with the amount of sagebrush habitat loss within 1 square kilometer. Nest survival was relatively invariant with respect to well density for all three species. In contrast, nest survival rates of all three species generally decreased with surrounding habitat loss due to energy development. Thus, although well density and habitat loss were strongly correlated, well density resulted in overly conservative estimates of nest survival probability. Our results emphasize the importance of careful evaluation of the appropriateness of particular indices for quantifying the effects of human-induced habitat change. For managers concerned about the effects of natural gas development or similar forms of human land use to co-occurring breeding birds, we recommend minimizing the amount of associated habitat conversion.