Powder River Basin News Pulse September 2022

Posted: October 19, 2022

The Powder River Basin | September 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- 22 (+2)
Total Rigs in United States – 769 (+10)
Total U.S. Rigs 42% YTD

State Permitting Data
Permits Filed – 79

Powder River Top Producer

Top Producer – EOG

Basin Highlights

Groups at Odds Over Methane Regulation

The Taxpayers for Common Sense watchdog agency has reported that, in the last ten years, 300 billion cubic feet of natural gas collected from public lands was flared or vented. The group estimates the nominal value of that lost gas to be around $949 million. The Wyoming Oil and Gas Conservation Commission has updated venting and flaring regulations in recent years, especially for wells that are six months old or older as newly-drilled wells often need to be flared or vented as they are brought onto production.

Converse County Oil and Gas Project Faces Legal Challenges

A 5,000-well project near Douglas, WY was approved two years ago and drilling has recently begun. Wildlife preservationists have sued the BLM, alleging that the BLM issued illegal exemptions to existing sage grouse regulations in order to move the project forward. As according to the BLM, the project could generate 8,000 jobs and around $28 billion in federal revenue. Other controversy has arisen around drilling through federally-owned rock from privately-held surface and thereby avoiding federal regulations.

Millions Flow to Wyoming to Plug Orphaned Oil and Gas Wells

Nearly 2,300 orphaned wells in Wyoming are in need of plugging and abandonment. The WOGCC will be receiving $25 million from the Infrastructure Investment and Jobs Act in order to assist in the plugging, abandonment, and surface reclamation of these oil and gas sites. Orphaned oil and gas wells are almost unilaterally uneconomic wells with higher operating costs than revenue and they can cost $15,000-$500,000 to properly abandon and reclaim.

Lower 48 Oil, Natural Gas Permitting Slumps, but Up from Year Ago

Month-over-month new well oil and gas permits are down in nearly every basin. The Permian was down 25% month-over-month from July to August 2022, the Eagle Ford was down 13%. and the Haynesville was down 63%. The Powder River Basin, by contrast, was up 70% in that same interval. The Permian accounts for 37% of total US drilling permits and the Powder River accounts for 10%. In Wyoming, 373 permits were awarded in August and 216 were awarded in July. North Dakota also saw a rise in permitting from July to August–up 13%. Rig counts have been fairly stable in recent months and a decrease in permitting might indicate slowed activity in the intermediate future.

Most Permit Approvals by Operator

1Anschutz Exploration29
5Rockies Resources4

Top Producers – Oil

RankCompanySeptember Oil Production (MBO)
3Continental Resources641
4Devon Energy515

Top Producers – Gas

RankCompanySeptember Gas Production (MMCF)
2Continental Resources3,074
4Devon Energy927

Rig Count

Wyoming Oil Production

Wyoming Gas Production

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