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Powder River Basin News Pulse August 2020

Powder River Basin News Pulse August 2020

The Powder River Basin| August 2020

Field Overview

The Powder River Basin, known for its coal deposits, is located in Southeast Montana and Northeast Wyoming. The basin is named so because it is drained by the Powder River. Major cities in the area include Gillete and Sheridan, Wyoming and Miles City, Montana. There is a recent resurgence in oil and gas production as a result of horizontal drilling and hydraullic fracturing. This resurgence is occurring mainly in the Wyoming part of the basin, which is historically known as the source of the basin’s oil.


State Drilling Statistics (End of August)

Total Rigs in Wyoming: 1
Total Rigs in United States: 254
Total U.S. Rigs down 72% YTD

State Top Producers

Top Oil Producer- Devon Energy
Top Gas Producer- Carbon Creek Energy


Financial & Economic Updates

A Behemoth Project for Wyoming

In early August, the BLM approved an absolutely massive project, dubbed the Moneta Divide Project, which includes the approval and development of 4,250 oil and gas wells. Aethon Energy Management and Burlington Resources combined their efforts to propose the project which is expected to recover 18.16 trillion cubic feet of natural gas and 254 million barrels of oil over 65 years generating $182 million for federal royalties, $87.5 million in state severance tax, and $106 million in ad valorem tax annually. The scope of work is not the only large part, considering that the project area includes 327,645 acres of land, of which 23% occupies private lands. Additionally, Aethon Energy, one of the companies involved, filed for a permit to increase their dumping of wastewater into creeks up to 8.27 million gallons per day after the Wyoming Department of Environmental Quality claimed Aethon was guilty of violating environmental regulations based on 2019 inspections of the creek. Only time will tell if the project proposal will be charged on these grounds.

Article Link


State Highlights

EOG Contractors Sue after Explosion

3 employees of Archrock Services, a service company contracted by EOG, are now suing for the incident that occurred in 2019 of last year. On December 5th of 2019, 2 of the employees were sent to alter the settings on a malfunctioning compressor. With 2 employees inside the building, and one standing outside, a leak in the inlet pipe feeding into the compressor ignited causing a flash fire to sweep through the building. OSHA has been conducting an investigation since then, and fault has not been established. It is unconfirmed whether there was a problem with the pipe’s design or installation, but the men are still suing because they feel EOG should have been warned of the hazardous conditions as it was EOG’s site. EOG has refused to comment on the litigation.

Article Link

Sage Grouse Strikes Again

Federal Judge Brian Morris stands strong in his opinion that all leases in the sage-grouse habitat should be tossed, but for now has suspended activity while companies scramble to appeal. This is a story that our network originally covered in May, and since then the Judge has voided 440 oil and gas leases in greater sage-grouse habitat in Montana and Wyoming claiming that the BLM has failed to follow its own plans for protecting the near threatened species. People are concerned about the sage grouse because it is a good indicator of the sagebrush ecosystem that it resides in. This is not a new occurrence by any means. A Judge in Boise Idaho issued a similar ruling in February which destroyed more than $125 million in oil and gas leases on public lands that were also home to the big bird. Both Judges claim that the Trump administration illegally curtailed public comment.

Article Link


Top Oil Producers (2020 cum)

RankCompanyProduction
(Bbl)
1Devon6,662,766
2Chesapeake4,763,650
3EOG4,541,859
4FDL Operating2,293,968
5Ballard Petro. Holdngs1,743,909

Top Gas Producers (2020 cum)

RankCompanyProduction
(Mscf)
1Carbon Creek41,231,220
2Chesapeake24,505,200
3EOG22,044,615
4Devon9,151,430
5Peak Powder River5,838,451

Refining


Wyoming Oil Production


Wyoming Gas Production


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The information contained in this newsletter is provided by RARE
PETRO Engineering, PLLC via the following sources unless otherwise
noted:

www.eia.gov
www.drillinginfo.com
www.bhge.com
RARE Petro Analytics

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