The DJ/Niobrara Basin | September 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- 20 (+3)
Total Rigs in Colorado- 22 (+1)
Total Rigs in United States- 769 (+10)
Total U.S. Rigs – 42% YTD

State Permitting Data
Permits Approved – 100

State Top Producers

Top Producer By BOE – Kerr McGee (Occidental)

Basin Highlights

Chevron’s massive oil well project in Colorado OK’d

After taking over Noble Energy a few years ago, Chevron is now one of the largest oil and gas producers in the state. They have just been given the green light on a project to replace 105 old wells with new ones in Weld county. The project was approved by the COGCC because it will reduce air pollution in areas close to schools and houses while also allowing land to be reclaimed. Chevron will be taking out many old wells and properly abandoning them while drilling 36 new ones with better climate technology. Much of the existing infrastructure in the area will also receive an upgrade, mainly in the form of electrification. The COGCCs decision to allow the project to happen is based on its improved environmental impacts. 

A quarter of Colorado’s 981 orphan wells went dormant when one natural gas gathering system was shut down

Third Creek, an oil pipeline company, had to dismantle its network in Adams, Arapaho, Elbert and Denver counties following safety concerns. Anadarko, the parent company of the pipeline network, has upset many of the smaller companies who rely on the network to transport their produced fluids. Those companies are now forced into bankruptcy and face penalties while the state is taking over responsibility for the orphaned wells. About a quarter of all the orphaned wells in the state are connected to the Third Creek network, creating a headache and large financial responsibility for the state.

Colorado Supreme Court considering the legal status of dormant oil and gas well leases

The recent Senate Bill 19-181 gave counties and cities greater power over mineral extraction, complicating current court rulings between oil and gas lease owners and the state supreme court. In 2017 Crestone Peak sought permission to drill 140 wells and was approved to do so by the COGCC. Over 5 years later they still haven’t drilled the proposed wells, raising questions about how long the COGCC decision is still valid. Now that state environmental regulations have changed, some of the proposed wells may not be up to code. The state Supreme Court is now dealing with the case to decide on the statute of limitations on approved permits to drill. 

Top CO Permitting By Operator

Top Producers by BOE

Change	Rank	Company	MMBOE Production (Jan-Sept/22)
+1	1	Kerr McGee (Occidental)	48.9
+1	2	PDC Energy	42.2
-2	3	Kinder Morgan	38.5
–	4	Noble Energy (Chevron)	35.2
–	5	TEP Rocky Mountain	28.9

Rig Count

Colorado Production

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PETRO Engineering, PLLC via the following sources unless otherwise
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www.eia.gov
www.drillinginfo.com
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