DJ/Niobrara News Pulse April 2022

Posted: May 24, 2022

The DJ/Niobrara Basin | April 2022

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

Active Drilling Rigs in Basin- 15 (No change)
Total Rigs in Colorado- 16 (+1)
Total Rigs in United States- 728 (+336)
Total U.S. Rigs 37.5% YTD

State Permitting Data
Permits Approved – 57

State Top Producers

Top Producer By BOE – Kinder Morgan

Basin Highlights

5,276 Acres in Colorado to be Leased for Extraction

Northwest Colorado is a well developed oil and gas extraction site where the Bureau of Land Management will be opening up 5,276 acres of leasable federal land to be developed. The land leases will be auctioned off as usual in mid-June. Although federal land extraction makes up a small portion of overall production within Colorado, leasing more federal land is a sign of support for the industry. The BLM has also increased the royalty rates for production on federal lands from 12.5% to 18.75%, the first increase in decades. 

Democrats Plan to Suspend Colorado’s New Gas Fee

Governor Jared Polis’ primary goal was to reduce the cost of living for Colorado residents, in part by cutting vehicle registration fees and delaying the implementation of a gas tax until next year. The cost of a gallon of gas is up over a dollar from prices one year ago, spurring creative means by the government to aid their constituents. Polis has also criticized oil and gas companies for underutilizing available permits, which if used, could also bring the cost at the pumps down. 

The EPA Moves to Declare the Front Range a “Severe” Air Quality Violator

Those living in Colorado know that Denver has smog issues, something easily evident on morning commutes to and from the city. Nine counties in the Front Range from Fort Collins to Castle Rock have been bumped up from “serious” to “severe” violators of federal ozone standards by the EPA. If the change in status is approved it will mean stricter air quality regulations for Colorado companies. One example of increased regulations is gas stations could be required to sell cleaner burning fuel, resulting in even higher gas prices for consumers. 

Here’s How Colorado Companies Plan to Reach Net-Zero

Denver start-up Project Canary is helping oil and gas companies to reach their Environment, Social and Governance (ESG) goals through emissions monitoring systems. Companies like these are becoming increasingly popular in industry to bring oil and gas companies to net-zero emissions. Companies with ESG goals are seen by investors as more valuable than their non-ESG counterparts, especially important in the fossil fuel industry that many investors are trying to stay away from. 

Pump jacks operate in an oil field in Midland, Texas U.S. August 22, 2018. REUTERS/Nick Oxford//File Photo

Top CO Permitting By Operator

RankCompanyPermits Approved
1Red Willow Production15
2Kerr McGee (Occidental)12
3Verdad Resources8
Hyperlinks to available Q3 2021 Reports

Top Producers by BOE

ChangeRankCompanyMBOE Production (Jan-Mar/22)
+11 Kinder Morgan13.5
-12Kerr McGee (Occidental)12.3
3PDC Energy10.3
4Noble Energy (Chevron)8.7
5TEP Rocky Mountain7.1
Hyperlinks to available Q3 2021 Reports

Rig Count

Colorado Production

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