The Powder River Basin | December 2022

Field Overview

The Powder River Basin, known for its coal deposits, is located in Southeast Montana and Northeast Wyoming. The basin is named so because it is drained by the Powder River. Major cities in the area include Gillette and Sheridan, Wyoming and Miles City, Montana. There is a recent resurgence in oil and gas production as a result of horizontal drilling and hydraulic fracturing. This resurgence is occurring mainly in the Wyoming part of the basin, which is historically known as the source of the basin’s oil.

State Drilling Statistics

Total Rigs in Wyoming- 20 (-1)
Total Rigs in United States- 771 (-5)
Total U.S. Rigs 28% YTD

State Permitting Data
Permits Approved – 13

Powder River Top Producer

Top Producer – EOG

Basin Highlights

Domestic Oil, Natural Gas Permitting Slumps in November, but Trajectory for Record Year

Many states around the US experienced a pull-back in permitting in October and November of 2022. Nationally, the permit count declined by 7% month-over-month from October to November, coming after a 16% slump from September to October. Wyoming experienced a 45% month-over-month dip in permitting moving into November. Pennsylvania, Kansas, and Utah were among the few states to post positive permitting movement.

Nearly 350,000 Acres in Wyoming Included in Proposed 2023 Oil and Gas Lease Sales

Announced on December 20, the Bureau of Land Management will be hosting a sale of 115 parcels totalling 95,580 acres in Q3 of 2023 in Wyoming. This announcement comes after the announcement of the sale of 209 parcels totalling 251,086 acres in Q2 of 2023. The Inflation Reduction Act stipulates that at least two million acres of onshore federal land must be bid out before wind and solar leases are offered. Both of these oil and gas lease rounds have been spurred by this clause. The Biden administration has offered the fewest acres for oil and gas leasing of any administration since World War II, which has triggered a number of lawsuits to spur the BLM into more lease sales to meet its legal obligation to hold such bid rounds.

Continental Resources Announces Doug Lawler as President and CEO

Doug Lawler, former CEO of Chesapeake Energy Corporation, has been appointed to the role of President and CEO of Continental Resources, one of the largest leaseholders and most active drillers in the Powder River Basin. Replacing William Berry, Lawler will oversee Continental’s transition to a private company as Harold Hamm and the Hamm family complete the repurchase of the outstanding shares of Continental not under Hamm’s control, and he will oversee the first Continental wells being drilled in the Permian Basin after their recent entry into the basin.

After Oil and Gas Leasing Loss, Wyoming Sues Feds—Again

Three months after a federal judge ruled that the Interior Secretary Deb Haaland and her office had legally delayed lease sales in Wyoming pending further environmental investigation, the Petroleum Association of Wyoming and the Western Energy Alliance are in the process of suing the same office for again delaying federal lease sales in Wyoming. Governor Mark Gordon is quoted as saying, “I firmly believe the [most recent] pause in lease sales was politically driven and not based in law or fact”.

Most Permit Approvals by Operator

Top Producers – Oil

Top Producers – Gas

Rig Count

Wyoming Oil Production

Wyoming Gas 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
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