Niobrara Oil Still Profitable at $80 bbl

Break-Even Thresholds for U.S. Shale Projects ($Bbl) - Image Credit:Bloomberg New Energy Finance

Break-Even Thresholds for U.S. Shale Projects ($Bbl) – Image Credit:Bloomberg New Energy Finance

According to a Bloomberg article titled Break-Even Points for U.S. Shale Oil, Niobrara shale oil is still profitable at $80 bbl the in the Wattenberg Hz.  Wattenberg Tier 2 profitability is marginal at an oil price of $80 bbl with an average break even price at $84.98 bbl. Wattenberg wells in Tier 1 areas are on average, profitable at $55.38 bbl.

A detailed description of the gradational nature of shale plays and how plays are classified into tiers is available from Kimmeridge Energy.

Gradational nature of shale plays (Source: Kimmeridge Energy)

Gradational nature of shale plays (Source: Kimmeridge Energy)

Shale plays are gradational in nature (see exhibit 5) (to the right), with a variety of thicknesses, depths, TOC, mineralogy, maturity, etc, across the play fairway,
which can be many thousands of square miles.

The core of the play occurs where the confluence of these different parameters is optimal. So for example, a confluence of good thickness, high TOC, requisite maturity, high porosity, suitable mineralogy, etc, is most likely to offer the best development economics across the play, although this needs to be proven through subsequent drilling and de-risking.” (Kimmeridge Energy)

A full article describing the gradational nature of shale oil plays is available from Kimmeridge Energy in an article titled Defining the Core of Shale Plays – Lessons from Cutting-Edge Research and Practical Experience

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Niobrara Denver-Julesburg Crude Takeaway Expansions

SEMGroup White Cliffs Expansion - Source RBN Energy

SEMGroup White Cliffs Expansion – Source RBN Energy

Sandy Fielden, RBN Energy LLC, October 1, 2014

The Denver-Julesburg (DJ) Basin of the Niobrara shale in Northeast Colorado is one of the hottest crude plays around at the moment. RBN expects DJ Basin crude production to nearly double from 235 Mb/d in August 2014 to 450 Mb/d by the end of 2019 – an increase of 215 Mb/d. That growing production has sparked an infrastructure-planning spree with 4 pipeline project announcements in the last two months that could add a whopping 600 Mb/d of takeaway capacity from the DJ to Cushing by 2017. On top of that rail-loading capacity is also expanding in the DJ. Today we describe the new midstream expansion plans.

In Part 1 of this series we noted growing crude production in the Denver Julesburg (DJ) and Powder River Basin (PRB) plays in the Niobrara shale in Colorado and Wyoming – up 260 percent to 360 Mb/d since January 2012 and expected to double again by the end of 2019. Takeaway capacity from the region is congested because local Rockies production must compete with crude streams passing through the region from western Canada and North Dakota en-route to Cushing and points south. Continue reading “Niobrara Denver-Julesburg Crude Takeaway Expansions” »

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Shell testing new laser-based sensor to find shale gas

HOUSTON – Royal Dutch Shell is testing a new device that uses lasers to help identify shale gas reservoirs, Wyoming-based oilfield service company WellDog announced Tuesday.

The device, which weights more than 100 pounds, is dropped into a wellbore where it shoots lasers and measures the frequency at which that light is reflected. That information helps production companies identify what type of hydrocarbons are located underground and where they are.

“The advantage of this is the sensor is down hole,” said WellDog CEO John Pope. “It’s a direct analyst of the exact oil or gas you’re trying to produce.”

The device is still in the testing phases. WellDog has been collaborating with Shell on the technology for about two years, Pope said. The hope is develop a system that gives producers a more accurate sense of where to drill, ultimately making drilling and fracking more efficient. Continue reading “Shell testing new laser-based sensor to find shale gas” »

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Longmont could still be sued over oil and gas rules despite deal to drop case

 – Reporter-Denver Business Journal - October 20, 2014

A deal to drop a lawsuit over Longmont’s 2012 oil and gas rules doesn’t protect the city from future suits over those regulations — or other cities that might consider copying Longmont’s rules — despite the city’s statements to the contrary, according to two of the parties involved in the case and a longtime Denver oil and gas attorney.

The deal, announced last week, ended legal action between the state, Longmont, theColorado Oil & Gas Association (COGA), Earthworks and the Sierra Club. Continue reading “Longmont could still be sued over oil and gas rules despite deal to drop case” »

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Geologic Hazards in Colorado

Colorado Geologic Hazards - Image Credit - Colorado Geological Survey

Colorado Geologic Hazards – Image Credit – Colorado Geological Survey

Colorado’s great diversity of rocks, geologic structures, soil types, topography, and climatic conditions combine to create vigorous and diverse geologic processes.  When humans move into this dynamic environment, these natural processes can become problematic as geologic hazards.

For example, naturally occurring, inactive landslides may be triggered into renewed activity by the construction of roads or buildings that disrupt the stability of the slope.  In addition, many of Colorado’s geologic hazards, such as heaving bedrock, swelling soils, and collapsible soils are commonly triggered by human activity that could have been mitigated though proper land-use practices.

Other geologic hazards, like earthquakes, rockfall, mudslides, and avalanches are naturally occurring; but can wreak havoc on buildings, roads, and other engineered structures.

The Colorado Geological Survey is actively involved in geologic hazards research throughout the state. Our goal is to reduce the impact of geologic hazards on the lives and property of our citizens.   Click this link to meet the dedicated people of the Colorado Geological Survey who devote their careers to this critical task.

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The incredible shrinking Keystone

Keystone XL Map - Image Credit  - ZME Science

Keystone XL Map – Image Credit – ZME Science

By ELANA SCHOR – 10/14/14 – Politico

The pipeline that launched so many street protests, ad campaigns and political headaches for the White House is increasingly irrelevant in the midterm elections and the energy markets — even for the groups that have fought so hard to either build it or block it.

Neither side will say publicly that the Keystone XL pipeline is less important than it once was. But after Keystone’s three-year rise to the top of Washington’s energy agenda, fueling lobbying and advertising bills well into the tens of millions of dollars, green groups and the oil industry are both moving on.

Environmental groups are happily endorsing pro-Keystone candidates, as long as they support President Barack Obama’s broader agenda of slashing greenhouse gases. Climate activist billionaire Tom Steyer, who’s spending up to $100 million to influence seven Senate and gubernatorial races, has yet to air a Keystone-focused ad in any of them. And oil companies have found plenty of other ways to get Canadian crude into the U.S., even as Keystone enters its sixth year of awaiting a permit from the State Department.

Keystone isn’t even North America’s biggest oil-sands pipeline project anymore. That title now belongs to a project most Americans have never heard of called Energy East, which would bypass the need for U.S. approval by piping Alberta’s heavy crude oil to Canada’s Atlantic provinces.

Essentially, both sides have already won: Keystone is stalled, yet oil is booming.

Read more: http://www.politico.com/story/2014/10/the-incredible-shrinking-keystone-111876.html#ixzz3Gk7dzNDJ

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Colorado’s court rulings against fracking bans drawing national attention

Hydraulic Fracturing Illustration - Idealized

Hydraulic Fracturing Illustration – Idealized

 – Reporter-Denver Business JournalOctober 15, 2014

Colorado is at the forefront of a national conversation on how close oil and gas operations should be to homes, schools and neighborhoods.

“People are watching Colorado, across the board, politically and policy-wise,” saidDoug Flanders, the spokesman for theColorado Oil & Gas Association, an industry trade group that has sued three Colorado cities over voter-approved bans on fracking within their jurisdictions. Continue reading “Colorado’s court rulings against fracking bans drawing national attention” »

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Where are the oil and gas jobs concentrated? Study says downtown Denver

Downtown Denver Skyscrapers - Image Credit - Wikepedia

Downtown Denver Skyscrapers – Image Credit – Wikepedia

By Mark Jaffe – The Denver Post – October 9, 2014

The biggest concentration of oil industry jobs in Colorado isn’t in the Front Range or Western Slope oil and gas fields. It is in the office towers of downtown Denver.

About 9,800 people are working for the industry in Denver — 60 percent more than in Weld County, according to a University of Colorado at Boulder Leeds School of Business study released Thursday. Continue reading “Where are the oil and gas jobs concentrated? Study says downtown Denver” »

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