The DJ/Niobrara Basin | December 2022
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- 13 (-3)
Total Rigs in Colorado- 20 (-1)
Total Rigs in United States- 771 (-4)
Total U.S. Rigs 28% YTD
State Permitting Data
Permits Approved – 86
State Top Producers
Top Producer By BOE – Kerr McGee (Occidental)
Anyone who has driven through Denver in the winter has likely noticed the plumes of white clouds coming from the refinery nearby. While many think the clouds are toxic pollutants of some sort, they are actually just water vapor used to cool off machinery. That refinery is the only one in the entire state and was recently powered down due to equipment damage caused by the recent extreme cold streak. A press release issued by Suncor, the owner and operator of the refinery, announced that operations may not resume until March while repairs are made. This single refinery is responsible for 35-40% of all the gasoline sold within Colorado, raising concerns about gas prices in the state for the coming months. Experts warn that gas stations could begin limiting supplies to the public to conserve it for essential services.
The tug-of-war between environmental advocacy groups and oil and gas operators seems to never end, and likely never will. The latest push by the pro-environment groups is to toughen the rules surrounding drilling new wells, and to require more detailed environmental impact evaluations per well. These evaluations are already required, however, these groups say they are not adequately outlining the possible side-effects of drilling. The Colorado Oil and Gas Conservation Commission (COGCC), is in charge of handling matters of this sort and is working with both industry and environmental groups to come to a conclusion. Last year (2022) the COGCC permitted a healthy 1,500 wells to be drilled, perhaps this year those numbers will dip should the rules become more stringent.
Southwest Gas Holdings Inc. bought a 2,160-mile pipeline network in early 2022 for $1.9 billion which they are now selling for around $1.5 billion. For those keeping track at home that’s a loss of $350-425 million, depending on how the tax situation is worked out. The network, being sold by MountainWest Pipelines, serves northwest Colorado, Wyoming and Utah with natural gas and will be received by Oklahoma-based pipeline giant The Williams Companies Inc. The purchase and selling of the pipeline network in such a short period of time is due to the companies over-evaluation of the assets and desire to return to their core business in its original states, Nevada, Arizona and California.
Top CO Permitting By Operator
Top Producers by BOE
|Change||Rank||Company||MMBOE Production (Jan-Sept/22)|
|+1||1||Kerr McGee (Occidental)||48.9|
|–||4||Noble Energy (Chevron)||35.2|
|–||5||TEP Rocky Mountain||28.9|
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