The DJ/Niobrara Basin | November 2021

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- 11 ( -1)
Total Rigs in Colorado- 12 (-)
Total Rigs in United States- 569 (+19)
Total U.S. Rigs 76% YTD

State Permitting Data
Permits Approved – 28

State Top Producers

Top Producer By BOE – OXY

Basin Highlights

Oil and gas regulators dial back rules that keep industry from sticking Colorado with bill for orphan wells

Recent COGCC mandate changes concerning well abandonment and plugging costs make it easier for small operators to stay in business while also remaining environmentally conscious. Changes to the definition of what an inactive well is, as well as the removal of a set dollar amount to terminate inactive wells were intended to account for the differences in business models for all operators in Colorado. Meanwhile, environmentalist groups are concerned about the number of wells abandoned and the impact the changes will have on the areas surrounding these wells.

Occidental Petroleum Stops Hedging Oil In 2022

Occidental Petroleum wants to discontinue hedging its oil output next year because prices are still high and have a lot of room to rise. Pioneer Natural Resources announced that it will drastically cut hedging as a result of increased oil prices. Scott Sheffield, the company’s CEO, predicted that oil prices will be between $80 and $100 per barrel in 2022. According to IHS Markit, losses in the first half of 2021 were $7.5 billion, but if oil prices maintained around $75 per barrel in the second half of the year, losses may rise to $12 billion as demand improves.

Oil company with history of leaks, spills, could pay less than half of $2 million fine

If K.P. Kauffman, an oil and gas business, complies with environmental and safety standards, it could pay less than half of a near-record $2 million punishment. The state agreed to reduce the company’s $2 million penalty, which was the second-largest penalty ever levied by the Colorado Oil and Gas Conservation Commission, to $795,000. In August, KPK went to trial on charges that it overlooked flow line leaks and oil spills in northern Colorado, as well as having weak cleanup operations

Brigham Minerals, Inc. Announces Accretive DJ Basin Acquisition

Brigham Minerals, Inc. stated today that it has reached an agreement to buy certain mineral and royalty interests in the DJ Basin for $44 million in cash and 2.2 million shares of Class A common stock, subject to certain closing adjustments. These interests include PDC Energy, Inc., Chevron Corporation, Occidental Petroleum, and Civitas Resources, which operate 8,400 net royalty acres mostly in Weld County. In addition, 2022 production is expected to be between 1,100 and 1,200 boepd, with 50 percent liquids.

Top CO Permitting By Operator

Top Producers by BOE

Change	Rank	Company	BOE Production (mmBOE) (8/21)
–	1	OXY	59.5
–	2	Civitas	55
–	3	PDC Energy	48
–	4	Chevron	40.3
+1	5	Great Western	14.3

Rig Count

Colorado Production

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The information contained in this newsletter is provided by RARE
PETRO Engineering, PLLC via the following sources unless otherwise
noted:

www.eia.gov
www.drillinginfo.com
www.bhge.com
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