Powder River Basin News Pulse June 2020

The Powder River Basin| June 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 June)

Total Rigs in Wyoming: 1
Total Rigs in United States: 284
Total U.S. Rigs down 73% YTD

State Top Producers

Top Oil Producer- Devon
Top Gas Producer- Carbon Creek


Financial & Economic Updates

BLM to Postpone Lease Sale

Originally scheduled for June 22, the BLM planned to open 170,000 acres of land to bidding by energy developers. In addition to the federal government halting sales in Wyoming, neighboring states like Montana and Idaho are being threatened by federal courts siding with conservation groups. These lawsuits are leading to the voiding of old oil and gas lease sales that occurred in Wyoming. This is tough for the state because much of the income and taxes that it generates are associated with hydrocarbon production and land sales. Unfortunately, that is all being tossed into a sea of uncertainty as the federal government struggles to make final decisions in this pandemic environment.

Article Link

State Budget in Shambles

Thanks to current events that we are all too familiar with at this point, the state of Wyoming faces a significant plunge in energy and other revenues that is projected to wipe out $1.5 billion in the next two years. The general side of the budget will lose $1 billion in revenues, while the school funding side of the budget is projected to lose $500 million. These budget revisions will likely cost the jobs of some government officials. This is primarily because much of the severance tax the state counts on from oil and gas is dwindling due to the pandemic.

Article Link


State Highlights

Much of the state highlights from this month centered around the fall of two items: coal & Chesapeake. The latter was focused on because Chesapeake was a huge operator within the Powder River Basin, and their restructuring will likely interfere with oil and gas production which in turn limits the state funds. Coal is in the headlines because it is just not as viable as an energy source due to its solid state limiting mobility. This is an issue for the state because many communities founded within the Powder River Basin were built around coal mining and there are all slowly starting to die. It is only a matter of time before these places will have to restructure their economies to a completely different trade.


Top Oil Producers (2020 cum)

RankCompanyProduction
(Bbl)
1Devon3,943,838
2Chesapeake3,161,460
3EOG2,317,794
4Ballard Petro. Holdngs1,100,657
5FDL Operating1,029,164

Top Gas Producers (2020 cum)

RankCompanyProduction
(MMscf / Month)
1Carbon Creek23,662,532
2Chesapeake17,659,306
3EOG12,026,461
4Devon5,395,916
5Peak Powder River3,605,782

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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