DJ/Niobrara News Pulse February 2022

Posted: March 22, 2022

The DJ/Niobrara Basin | February 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- 14 (+2)
Total Rigs in Colorado- 14 (+2)
Total Rigs in United States- 650 (+40)
Total U.S. Rigs 62% YTD

State Permitting Data
Permits Approved – 57

State Top Producers

Top Producer By BOE – Kerr McGee (Occidental)

Basin Highlights

Oil and Gas Company Challenges Colorado’s No-Drill Zone

Colorado has some of the strictest regulations of all the oil and gas producing states. One of the rules the Colorado Oil and Gas Conservation Commission or COGCC has put in place is that no wells may be drilled within 2,000 feet of a house, with a few exceptions. Occidental Petroleum is requesting permission to drill 33 wells at 2 sites within the limit, stipulating they will prop up 32-ft walls and take steps to neutralize odors coming from the operation. This has, of course, been met with opposition and the final decision is now in the hands of the COGCC. 

Why a Reduction in Oil and Gas from Russia will be felt in Colorado

The downturn of COVID and Russian imports dropping to an all time low has experts forecasting an increase in the price of gasoline, even in a state such as Colorado where oil and gas is produced. The price of gas is largely based on the price of oil, and as supply dips and demand rises, an increase in its price is inevitable. While bad for consumers it works out well for American producers who now have more opportunities to export their products to countries struggling to meet energy needs.

Colorado Joins in Effort to Develop “Hydrogen Hub” to make Clean-Burning Fuel for Vehicles more Available

There is $8 billion available in federal infrastructure funding approved for building several hydrogen hubs across Colorado, New Mexico, Utah and Wyoming. These hubs will be located in each state at key points along the highway system to provide the much needed infrastructure hydrogen fuel requires prior to becoming a reliable source of energy. Hydrogen energy has the potential to be a clean energy source, however, it is currently produced largely by fossil fuels. It has caused a chicken and egg situation between hydrogen fueled vehicles and hydrogen infrastructure. The federal funding is hoping to end the debate and start off the infrastructure. 

Colorado CCUS Task Force Releases Recommendations on Meeting State Climate Goals

Colorado School of Mines in collaboration with the State of Colorado Carbon Capture, Utilization and Sequestration (CCUS) Task Force released a set of recommendations on how carbon capture can be used to help meet state climate goals. Some of the key recommendations include; CCUS should be used in ways that support new economic opportunities and the COGCC should obtain the authority from EPA to regulate CO2 injection wells within the state. Using CCUS, Colorado hopes to reduce GHG emission levels 50% by 2030 and 90% by 2050 compared to 2005 levels.  

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

ChangeRankCompanyBOE Production (mmBOE) (01/22)
1Kerr McGee (Occidental)79.8
2PDC Energy65.4
+13 Kinder Morgan52.4
+34Extraction Oil & Gas (Civitas)32.9
+25Caerus Oil & Gas27.5
Hyperlinks to available Q3 2021 Reports

Rig Count

Colorado Production

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