The Powder River Basin| February 2021
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 Gillete and Sheridan, Wyoming and Miles City, Montana. There is a recent resurgence in oil and gas production as a result of horizontal drilling and hydraullic 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 (End of February)
Total Rigs in Wyoming- 5
Total Rigs in United States- 402
Total U.S. Rigs down 49% YTD
State Top Producers
Top Oil Producer – EOG Resources
Top Gas Producer – Carbon Creek
Delay on Wyoming Lease Sale
Wyoming had planned to go through with its quarterly lease sale, but the Biden administration has put a halt to that. The BLM has mentioned that this delay will allow the new administration to get up to speed and comb over environmental policy currently associated with sales. Industry participants are worried for the mid to small cap companies that typically benefit from these lease sales. They often don’t have the capital to compete with the supermajors, so lease sales like these help keep those companies afloat, especially if they are looking to replenish portfolio reserves. Others are pleased with the administration’s decision as they feel taxpayers should reap more benefits from oil and gas activity, and this pause may give the Biden administration an opportunity to do so.
Governor to Adjust Severance Tax
Wyoming Governor Mark Gordon understands how impactful the federal moratorium and other policies can be to his constituents, so he backed several legislative proposals aiming to address these people. One of these proposals would slash the states severance tax levied on oil and gas operators in half. Many oppose the bill as it is just another subsidy for oil and gas and does not address the looming state budget issues. Governor Gordon has doubled down on coal saying it will be necessary for extracting and refining rare earth minerals necessary to produce green tech. Other bills introduced focus on tourism and agriculture as these two combined with oil and gas are what bring most of the money into the state.
Top Oil Producers (2021 cum)
Top Gas Producers (2021 cum)
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Wyoming Oil Production
Wyoming Gas Production
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