DJ/Niobrara News Pulse March 2022

Posted: April 30, 2022

The DJ/Niobrara Basin | March 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 (+1)
Total Rigs in Colorado- 15 (+1)
Total Rigs in United States- 698 (+48)
Total U.S. Rigs 16% YTD

State Permitting Data
Permits Approved – 57

State Top Producers

Top Producer By BOE – Kinder Morgan

Basin Highlights

Colorado Oil Regulator Rejects Occidental’s Plan to Drill Near Homes

A 2020 Colorado ruling limits drilling near homes to be at least 2,000 ft away. Occidental has recently sought an exemption to the rule to drill in Firestone within 800 ft of the nearest home. The request was denied by the COGCC due to it being too close to residential homes. The Firestone site also has some unfortunate history with the industry. In 2017 Anadarko Petroleum was responsible for an explosion that resulted in the death of two people, an event that is sure to dissuade residents in the area to be open to more drilling. 

Colorado Oil and Gas Regulators Approve ‘Strongest in the Nation’ Financial Rules

The Colorado Oil and Gas Conservation Commission (COGCC) has voted to adopt a new set of rules for the state that will greatly increase the number of bonds producers will have to provide to cover the potential costs of cleaning up wells. Large producers who are at a low risk of bankruptcy will be required to provide bond amounts of $1,500 and smaller ‘riskier’ producers $110,000+ per well. Fees for producers will also increase to create a fund of millions of dollars that will be used to clean up abandoned wells. The COGCC is proud to announce that the new regulations are “the strongest in the nation.”

Drill baby drill? Colorado oil producers have nearly 3,000 approved permits

Colorado producers maintain low reinvestment levels despite soaring oil prices. Civitas is the newest producer to tell their investors their focus is on returning the most capital. In reaching that goal, Civitas CEO Ben Dell has said the company won’t change the plan they have already laid out for the year in spite of $100 a barrel oil. There are ~1,900 approved permits to drill in the DJ basin, however, a volatile market and other restrictions make it uneconomical for producers to complete them, hence the general trend in the state to take small steps in bringing that number down. 

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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