Friday, October 14, 2011
Most oil and gas companies are tight-lipped about what they're finding in the promising Niobrara play.
But a local energy-analysis firm says it expects new oil production from the Niobrara’s Colorado-Wyoming region to soar 200 percent in five years, to nearly 350,000 barrels per day.
"The companies are not backing away [from the Niobrara]," said Adam Bedard, senior director of energy analysis for Evergreen’s Bentek Energy, a division of The McGraw-Hill Cos. (NYSE: MHP). "Average production is going up, and they’re adding rigs. That means more tax dollars into Colorado, and more jobs."
"That’s the problem with the Niobrara; it has spotty results," Bedard said. "It’s a complex play."
Similarities to Bakken field
But, Bedard added, even the Bakken oil field ” the North Dakota area at the center of a recent surge in U.S. domestic crude oil production ” was difficult to crack in its the early days five or six years ago.
"The Niobrara may not be as easy as the Bakken, but there was a time when the Bakken wasn’t easy either," Bedard said.
Bentek’s study looked at Niobrara-focused operations in the Denver-Julesburg (DJ) area, along the Colorado-Wyoming border, and the Powder River Basin, in northeastern Wyoming. In those two areas, the number of drilling rigs developing new horizontal wells ” a snapshot of current activity ” has climbed to 30 rigs, double the number running a year ago, according to Bentek.
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