DJ/Niobrara News Pulse December 2021

Posted: January 27, 2022

The DJ/Niobrara Basin | December 2021

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- 11 ( -1)
Total Rigs in Colorado- 12 (-)
Total Rigs in United States- 586 (+17)
Total U.S. Rigs 53% YTD

State Permitting Data
Permits Approved – 50

State Top Producers

Top Producer By BOE – KERR MCGEE


Basin Highlights

Colorado Oil, Natural Gas Activity Rising, But Employment Still at 15-Year Low

The Colorado Oil and Gas Association estimates that 9,000 industry jobs were lost in Colorado due to the pandemic in 2020. Recovery has been slow but is ramping up to pre-pandemic levels and should surpass those levels during 2022. A CU Boulder study attributes the recovery to well efficiency improvements, lower per-barrel well costs over the last price cycle, and higher commodity prices. Although production is also expected to increase this year it isn’t expected to do quite as well as in years past such as the historic 2019.

Colorado Oil and Gas Regulators Release Updated Bonding Proposal Ahead of January Hearing

The identification of 236 orphaned wells across Colorado inspired a bill requiring COGCC (Colorado Oil and Gas Conservation Commission) to revise the current bonding requirements. The current rules have been criticized by environmental groups as being too loose. Some groups are pushing for payouts as high as $78,000 per well, something that would likely bankrupt many small operators. New requirements from the COGCC are still pending. 

First-in-the-U.S. Rules that Give Oil and Gas Industry Leeway in Slashing Emissions OK’d in Colorado

Operators in Colorado’s DJ basin get some wiggle room when it comes to dealing with methane emissions. The state’s Air Quality Control Commission loosened its rules surrounding the industry’s most harmful pollutant, methane. Under these new rules, operators can choose how and where they cut methane emissions to meet the new standards based on the amount of oil and gas produced. The freedom to do it how operators best see fit has been given in hopes of reaching the state’s goals of reducing greenhouse gas emissions from 2005 levels by 26% by 2025.

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
1KERR MCGEE12
2VERDAD RESOURCES LLC12
3PDC ENERGY INC10
Hyperlinks to available Q3 2021 Reports

Top Producers by BOE

ChangeRankCompanyBOE Production (mmBOE) (8/21)
+71KERR MCGEE73.1
+12PDC Energy59.7
+63 Noble Energy49.4
+34Kinder Morgan47.7
+15TEP ROCKY MOUNTAIN 35.6
Hyperlinks to available Q3 2021 Reports

Rig Count

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

Related Tags: Colorado | DJ | News Pulse

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