Powder River Basin News Pulse July 2021

Posted: August 18, 2021

The Powder River Basin | July 2021

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 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

Total Rigs in Wyoming- 16
Total Rigs in United States- 479
Total U.S. Rigs up 86% YTD

State Permitting Data
Permits Approved – 32

Powder River Top Producer

Top Producer by BOE – Carbon Creek

Basin Highlights

Contango Oil and Gas to Acquire ConocoPhillips Wyoming Assets

On July 8, Contango Oil and Gas agreed to acquire ConocoPhillips’ Wind River Basin asset in Wyoming for a cash deal totaling $67 million. ConocoPhillips plans to divest up to $10 billion in non-core assets over the next two years following its multibillion-dollar acquisition of Concho Resources. Contango’s acquisition comes on the heels of KKR’s merger agreement with Independence Energy LLC where KKR plans to use the resulting company to pursue all its upstream oil and gas opportunities. Contango had already set out to become a consolidator of conventional, low-declining oil and gas assets in the U.S. before its merger agreement with Independence. As per the company release, Contango aims to fund the ConocoPhillips deal with cash on hand and credit available under its existing revolving credit line.

Article Link

Oil and Gas Responsible for 26% of State GDP, 2019

The Petroleum Association of Wyoming and the American Petroleum Institute released an economic analysis highlighting just how much of an impact the industry had on the state’s income. Wyoming’s oil and gas industry contributed $10.6 billion to the state’s gross domestic product (26.3%). Overall, the oil and gas industry supported 68,600 total jobs (28,300 directly and 40,300 indirectly), or 16.6% of Wyoming’s total workforce. Petroleum Association of Wyoming President Pete Obermueller mentioned, “Wyoming’s success is intrinsically linked to the natural gas and oil industry. This report brings to light the fact that the industry’s reach goes far beyond the well pad and into main street business across Wyoming. In order for Wyoming to see a full recovery, we must see a return to robust production of our natural gas and oil resources.”

Article Link

Energy Rebound Program Funds More Projects

In the second phase of the Energy Rebound Program, the Wyoming Oil and Gas Conservation Commission will distribute $12 million in CARES Act money to 216 selected projects. “What this program was designed to do is really try to jump-start those projects that, because of COVID, maybe didn’t quite make economic sense,” said Ryan McConnaughey, communications director for the Petroleum Association of Wyoming. 744 of the 864 planned projects filed between June 15 and June 25 were judged eligible for the program, however, the amount of funds available remained the same during that time period. Approximately one-third of the ideas submitted were approved for assistance, and the creators will be compensated for their labor through the end of the year. Even so, many projects cannot be fully funded with a grant of up to $500,000. The majority of enterprises still have to find the money for any remaining costs on their own. An additional round of the Energy Rebound Program is unlikely due to the state’s depleting CARES Act resources.

Article Link

Operators With Most Permits (May)

3Impact Exploration5
Hyperlinks to available Q2 2021 Reports

Top Producers BOE (2021 cum)

1Carbon Creek
Hyperlinks to available Q2 2021 Reports

Rig Count

Wyoming Oil Production

Wyoming Gas Production

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