The Powder River Basin| April 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
Active Drilling Rigs in Basin- (-)
Total Rigs in Wyoming- 6
Total Rigs in United States- 465
Total U.S. Rigs down 53% YTD
State Top Producers
Top Gas Producer- Carbon Creek
Top Oil Producer- EOG
Financial & Economic Updates
Wyoming to Stomach a Hefty Blow to Economy
Although the OPEC+ deal to cut back production has been mostly beneficial, it could be too little, and too late. Until the pandemic is resolved, there is no way to stimulate enough demand for these small producers in Wyoming to survive. According to Ryan McNaughton, communications direction for the Petroleum Association of Wyoming, every dollar the price of oil loses, the state sustains an annual loss of $12.5 million. For every Wyoming rig shut down, roughly 100 workers are displaced. Since February, the rig count had fallen from 20 to 10 rigs, at the time of his report.
State Highlights
Wyoming Struggle to Reach the International Market
The Powder River Basin is home to massive gas reserves which have been exploited for a while, but lack the advantage of being close to sea ports like the Marcellus basin. Being able to take advantage of a sea port means an international market can be accessed, something the landlocked Powder River Basin has dreamed of for years. Last month, the Federal Energy Regulatory Commission (FERC) gave the go ahead for a 229 mile pipeline and corresponding LNG export terminal in Coos Bay, Oregon. This is big news for Wyoming specifically, as access to this pipeline correlates to access to Asian Markets. This project has been battling obstacles for over a decade, but the recent approval means that Wyoming will still be able to compete with gas producers that have easier access to international markets.
Wyoming DEQ Sets Up Plan if Operators Can’t Meet Requirements Due to COVID-19
The Wyoming Department of Environmental Quality (DEQ) began working to accommodate operators who were struggling to be in compliance with the state. While the DEQ emphasized that COVID-19 is not an excuse to be in non-compliance, they wanted to provide a program that worked to provide relief. The aim is to excuse operators in the case where a lab technician is not available to send water samples, or an employee is not available to log and submit production data to the state. Entities are still expected to make efforts to be in compliance with all regulations, but there is now increased flexibility in dealing with violations, missed deadlines, and consequences.
Top Gas Producers (2020 cum.)
| Rank | Company | Production (MMscf / Month) |
| 1 | Carbon Creek | 17,866,419 |
| 2 | Chesapeake | 13,983,122 |
| 3 | EOG | 12,026,461 |
| 4 | Devon | 4,028,959 |
| 5 | Peak Powder River | 2,772,042 |
Top Oil Producers (2020 cum.)
| Rank | Company | Production (Bbl) |
| 1 | Devon | 2,930,189 |
| 2 | Chesapeake | 2,443,866 |
| 3 | EOG | 2,317,794 |
| 4 | FDL Operating | 1,029,164 |
| 5 | Anadarko | 777,918 |
Refining
Wyoming Gas Production
Wyoming Oil Production
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