DJ/Niobrara News Pulse May 2023

Posted: June 28, 2023

The DJ/Niobrara Basin | May 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- 14 (-)
Total Rigs in Colorado- 16 (-1)
Total Rigs in the United States- 682 (-32)
Total U.S. Rigs 10.4% YTD

State Permitting Data
Permits Approved – 76

State Top Producers

Top Producer By BOE – Kerr McGee (Occidental)

Basin Highlights

Evaluation of the Capacity for Water Recycling for Colorado Oil and Gas Extraction Operations

Chevron has agreed to acquire PDC Energy with a total enterprise value of $7.6 billion. The deal adds 275,000 net acres to Chevron’s already dominant DJ Basin position (made stronger by the recent purchase of Noble Energy) and 25,000 acres to Chevron’s Permian Basin portfolio, which is the central focus of Chevron’s current development plan. The deal is expected to add $1 billion to Chevron’s free cash flow and adds 10% to their proved oil equivalent reserves for under $7 per barrel.

Evaluation of the Capacity for Water Recycling for Colorado Oil and Gas Extraction Operations

The DJ basin and the other oil and gas provinces within Colorado are currently using twice the volume of fresh water as they were in 2013, as reported by FracTracker Alliance, an environmental group that tracks water usage on hydraulic fracturing jobs. The report indicates that the volume of wastewater produced by the oil and gas industry is more than the volume requisite for injection, leading to the conclusion that all fracturing operations could be conducted using waste water. Little is said in the article to propose means by which this water could be used.

Crown Exploration’s Niobrara Wells are Producing Some of the Cleanest Oil in the U.S.

Niobrara wells are among the most environmentally friendly wells in the world due to the high standards to which operators in the Niobrara are held. Operators are required to implement an air quality monitoring plan, they are required to submit exhaustive construction permits when setting engines on location (for compressors, among other things), they have strict limitations on flaring, and they use closed-loop drilling systems in order to reduce the amount of gas that escapes into the atmosphere from the entrained in the drilling mud system.

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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