DJ/Niobrara News Pulse March 2023

Posted: April 20, 2023

The DJ/Niobrara Basin | March 2023

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- 17 (+1)
Total Rigs in Colorado- 18 (-)
Total Rigs in the United States- 748 (-1)
Total U.S. Rigs 7.8% YTD

State Permitting Data
Permits Approved – 76

State Top Producers

Top Producer By BOE – Kerr McGee (Occidental)

Basin Highlights

A Proposed Utah Railway Could Quadruple Oil Production in the Uinta Basin

The Uinta Basin Railway would link northeastern Utah and northwestern Colorado oil resources to the national rail network, enabling a four-fold increase in crude oil output. The Uinta Basin’s oil and gas production has contributed to some of the worst air pollution in the state, which has sparked resistance to the project. The project’s environmental concerns have been exaggerated, and the Surface Transportation Board’s EIS is currently being contested in court. Some say a leak of oil into the Colorado River, which provides water to 40 million people and has already been dry for 20 years, might be “catastrophic”, while others argue the waxy crude will be simpler to clean up than other oil spills. 

Occidental budgets hundreds of millions more toward Colorado oil production

In its Rockies business unit, which is primarily focused on the DJ Basin in Colorado, Occidental intends to spend $700 to $800 million on oil well drilling and operations this year (2023). The increase results from having plenty of drilling permits in Colorado and optimism in its ability to continue to get more. In the first half of 2023, Oxy will be able to complete and put into production a more significant number of new wells thanks to the presence of two drilling rigs. At least 90 new wells are expected to be finished in the region by 2023, according to Occidental, which is an increase of 20 new wells over its previous prediction.

Why Gov. Polis’ ozone crackdown could spur a debate over new oil and gas permits

After Governor Jared Polis ordered state agencies to reduce emissions by 30% by 2025 and 50% by 2050, Colorado clean air activists are hurrying to finish a plan to mitigate the oil and gas industry’s contribution to Front Range ozone pollution. The main source of ozone-forming substances in the region is believed to come from the oil and gas sector, which is said to produce more nitrogen oxide than all vehicles in the state combined. The governor’s ozone plan’s objectives, according to Colorado Oil and Gas Association President Dan Haley, are “challenging,” but he said oil and gas companies have the best chance of succeeding if they meet them.

Colorado oil and gas companies offer $459 million to guarantee their wells are plugged eventually

Large Colorado oil and gas companies have offered $459 million in well-plugging guarantees to meet the state’s new standards for orphan wells, however, this is far less than the COGCC was targeting. Smaller operators, on the other hand, are offering even less money to cover their abandonment costs and have only agreed to contribute 14% of the $360 million estimate for abandonment expenses. Operators have pledged to plug and abandon their wells in the state over the course of the next seven years; with 1,800 wells on the list for plugging and 4,600 wells slated for plugging and reclamation. 

Top CO Permitting By Operator

RankCompanyPermits Approved
1Noble Energy13
2 Kerr McGee (Occidental)10
3PDC Energy1
Hyperlinks to available Q3 2021 Reports

Top Producers by BOE

RankCompanyMMBOE Production (Feb/23)
1 Kerr McGee (Occidental)29.9
2Noble Energy22.9
3PDC Energy21.6
4Extraction Oil and Gas16.6
5Great Western9.3
Hyperlinks to available Q3 2021 Reports

Rig Count

Colorado Production

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