DJ/Niobrara News Pulse July 2020

The DJ/Niobrara Basin| July 2020

Field Overview

Located mainly in the Northeast of Colorado, the Denver-Julesburg Basin consists of five main oil-producing formations: Niobrara sections A-C, Codell, and Greenhorn. These five plays produce over 90% of Colorado’s oil/gas.

State Drilling Statistics (End of July)

Active Drilling Rigs in Basin: 4
Total Rigs in Colorado: 5
Total Rigs in United States: 251
Total U.S. Rigs down 73% YTD

State Top Producers

Top Oil Producer- Kerr McGee Oil & Gas Onshore LP
Top Gas Producer- Kinder Morgan


Financial & Economic Updates

Second Largest DJ Producer to be Acquired

Chevron has announced a deal to acquire Houston based Noble Energy, the second largest oil and gas producer in the DJ Basin, for $5 billion. Chevron expressed interest in Noble thanks to their “low cost, proved reserves and attractive undeveloped resources.” This deal will expand Chevron’s shale portfolio with 336,000 acres in the DJ Basin alone. There have been a few asset trades by this point, but this is the first major acquisition to go down since the corona virus pandemic took hold of the world. Noble investors will receive a small portion of Chevron shares, and the total value of the deal with debt comes out to $13 billion. Chevron was set to acquire Anadarko before it got into a bidding war with Occidental, but hindsight is 2020, and it looks like Chevron got the better deal in the end as Anadarko’s portfolio is rather comparable to Noble’s. This transaction is expected to close in Q4 2020.

Article Link


State Highlights

Polis Forces “Compromise”

Colorado Governor Jared Polis claims to have established a truce that would prevent ballots from both the industry and activists from entering the 2020 and 2022 elections. In an opinion column, the governor expressed his distaste for the returning ballots from both sides that he claims waste everyone’s time and money. This seemingly forced compromise will prevent the industry from pushing a restriction prevention ballot and an economic impact statement ballot. The activists will not be able to push their ballots regarding setbacks, local moratoriums, and increased state oversight. While those involved in the industry have not made many comments, the activists from Colorado Rising and other independent organizations say they are not part of the governor’s agreement and still plan to introduce the aforementioned ballot measures in 2022.

Article Link

Air Quality Rules here to Stay

A Denver district judge has waived away a lawsuit from Weld County challenging new air quality regulations. Weld County was attempting to make the argument that the 2019 legislation, which emphasized public safety and the environment over fossil fuels, was threatening the local economy. The judge ruled that the state Air Quality Control Commission had precedence over the county, even though Weld County is home to almost half of Colorado’s oil and gas activity. It turns out that the rules for increased inspections of well sites and equipment are here to stay. Ten other counties in western Colorado have similar lawsuits pending, but it is likely that Weld County has set the precedence for their dismissal as well.

Article Link


Top Oil Producers (2020 cum)

RankCompanyProduction
(Bbl)
1Kerr McGee20,084,307
2Noble Energy13,411,234
3PDC Energy11,293,921
4Extraction Oil and Gas8,445,626
5Great Western4,228,205

Top Gas Producers (2020 cum)

RankCompanyProduction
(Mscf )
1Kinder Morgan171,409,725
2Kerr McGee166,322,746
3PDC Energy97,411,349
4TEP Rocky Mtn. 96,533,956
5Noble Energy72,935,310

Refining

Colorado 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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