The Powder River Basin| May 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 May)
Total Rigs in Wyoming- 2
Total Rigs in United States- 301
Total U.S. Rigs down 69% YTD
State Top Producers
Top Oil Producer- Devon
Top Gas Producer- Carbon Creek
Financial & Economic Updates
Wyoming’s Largest Taxpayer in Hot Water
Ultra Petroleum Corp, the largest gas producer and taxpayer in Wyoming, has recently filed for bankruptcy. Operations for Ultra halted in September of last year as the company had too much debt, and did not want to produce at such depressed prices. Now that prices are even lower, they have filed voluntary petitions for reorganization under Chapter 11 of the bankruptcy code. They plan to turn all $2 B of their debt into equity. The goal of the restructuring aims to result in an enterprise with little debt, good liquidity, and significant free cash flow that supports a large-scale, low cost base of natural gas and condensate production. Unfortunately, this is not Ultra’s first experience with bankruptcy as they filed for chapter 11 once again in 2016.
State Highlights
All Energy Delivers Underwhelming Tax Revenue
As Trump has recently approved cuts for oil and gas royalties on public lands, Wyoming lawmakers are bracing for a significant revenue shortfall from the Powder River Basin. Shannon Anderson, an attorney with the Powder River Basin Resource Council, says Wyoming has tied its wagon to oil and gas development. Having the feds excuse royalties like this could interfere with the state’s ability to provide health care and education for Wyoming. Fortunately, oil and gas generates enough revenue to allow it to be the priority for the state. Renewable energy is also experiencing its fair share of struggles. The solar industry expects to employ just two thirds of the workers it originally projected through June. Almost half of the jobs lost in the energy sector during the pandemic have come from the renewable energy industry.
Top Oil Producers (2020 cum)
| Rank | Company | Production (Bbl) |
| 1 | Devon | 3,943,838 |
| 2 | Chesapeake | 3,161,460 |
| 3 | EOG | 2,317,794 |
| 4 | Ballard Petro. Holdngs | 1,100,657 |
| 5 | FDL Operating | 1,029,164 |
Top Gas Producers (2020 cum)
| Rank | Company | Production (MMscf / Month) |
| 1 | Carbon Creek | 23,662,532 |
| 2 | Chesapeake | 17,659,306 |
| 3 | EOG | 12,026,461 |
| 4 | Devon | 5,395,916 |
| 5 | Peak Powder River | 3,605,782 |
Refining
Wyoming Oil Production
Wyoming Gas Production
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