Highlands Natural acquires Colorado shale opportunity

Picture of ConocoPhillips Drill Rig drilling in the Niobrara Play - Image Credit ConocoPhillps

Picture of ConocoPhillips Drill Rig drilling in the Niobrara Play – Image Credit ConocoPhillps

procactivinvestors July 25, 2016

Highlands Natural Resources Plc (LON:HNR) has struck a deal to add another new project to its portfolio, acquiring shale acreage in Colorado.

The proposed transaction sees the company secure 100% of a project starting, where it would initially drill as many as six horizontal wells targeting the Niobrara shale.

It would pay a total of US$500,000 in cash (US$250,000 initially) and will give the seller royalties over future revenues. After royalties to both the seller and the State of Colorado the company will be left with 80% revenues from the project.

Drilling could start before the end of 2016, as HNR has revealed that talks are already underway with several industry partners for joint financing and development.

The project is bordered by acreage that’s already been developed by ConoccoPhilips, which has had nearby wells that have produced some 50,000 to 100,000 barrels of oil in aggregate over their first six months.

As such, these nearby ConoccoPhilips wells are among the top 12% of Niobrara shale wells, HNR highlighted. It added that Niobrara, producing some 371,000 bopd (according to July 2016 data), us ranked as the United States’ fourth largest tight oil play.

Continue reading story at proactiveinvestors

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Drilling setbacks carry big price tag for Colorado economy

University_of_Colorado_LogoBy ALDO SVALDI – Denver Post – July 14, 2016

Colorado could forego 54,000 jobs and $7.1 billion in economic activity over the next 5 years if voters approve a ballot measure to prevent drilling for oil and gas within 2,500 feet of existing structures and sensitive areas, according to a University of Colorado analysis released Thursday.

Initiative 78, should it win this November, would put about 90 percent of the state off limits to oil and gas drilling, according to an analysis in May from the Colorado Oil and Gas Conservation Commission.

The university’s Business Research Division, using a sophisticated computer model called REMI, estimated losses of 104,000 jobs and $14.5 billion in economic activity over a longer 15-year period based on those restrictions.

“Companies simply would not be able to operate here. This initiative, were it to pass, would usher in the probable demise of the oil and gas industry in Colorado,” Metro Denver Economic Development Corp. CEO Tom Clark said in a statement.

Continue reading article at The Denver Post

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Colorado firewater: mostly natural, industry leaks seldom to blame, CU study finds

DJ Basin Oil Drilling Rig - Image Credit - Encana Inc.

DJ Basin Oil Drilling Rig – Image Credit – Encana Inc.

By Bruce Finley – Denver Post – July 11, 2016

95 percent of methane gas came from naturally occurring microbial processes, often underground coal seams, usually not oil and gas industry

Some Coloradans can light their water on fire: methane natural gas has penetrated groundwater at 64 percent of sites state regulators tested since 1988 in the northeastern part of the state, University of Colorado researchers have found.

But more than 95 percent of this gas came from naturally occurring microbial processes, often near shallow underground coal seams — not the oil and gas industry.

Methane-tainted groundwater can lead to flammable drinking water trickling from household taps.

The CU study — funded by the National Science Foundation and based on an analysis of Colorado Oil and Gas Conservation Commission records — concluded that the industrial process of hydraulic fracturing, or fracking, is not a primary cause of methane contamination of groundwater.

Continue reading story at The Denver Post

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EPA Issues Final Methane Standards for New Oil and Gas Sources

USEPAEngineering360 News Desk, May, 23, 2016

The U.S. Environmental Protection Agency (EPA) has finalized standards designed to reduce methane, volatile organic compounds (VOCs) and toxic air emissions from new, modified and reconstructed sources in the oil and natural gas industry.

The agency is starting the process to control emissions from existing oil and gas sources by issuing for public comment an Information Collection Request (ICR). This will require companies to provide the information that will be necessary for EPA to reduce methane emissions from these sources as well.

The agency’s actions are part of the federal government’s strategy under President Obama’s Climate Action Plan to achieve the goal of cutting methane emissions from the oil and gas sector by 40 to 45% from 2012 levels by 2025. EPA says that, by 2025, the standards for new and modified sources are expected to reduce methane emissions by 510,000 short tons, ozone-forming VOCs by 210,000 tons and air toxics, such as benzene, toluene, ethylbenzene and xylene, by 3,900 tons.

After reviewing more than 900,000 comments received on its August 2015 proposal, EPA updated a number of aspects in the final rule, including removing an exemption for low-production wells and requiring leak-monitoring surveys twice as often at compressor stations, which have the potential for significant emissions. The final rule also provides companies a pathway to align the final standards with comparable state-specific requirements they may have.

Continue reading story at Engineering360

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New data will help Colorado study health effects of fracking

Diagram of Fracking

Diagram of Fracking

New data on air pollution from fracking wells in Colorado will be a big help in assessing whether the emissions are harmful to human health, state officials say

By DAN ELLIOTT, Associated Press – June 14, 2016

DENVER (AP) — New data on air pollution from fracking wells in Colorado will be a big help in assessing whether the emissions are harmful to human health, state officials say.

A three-year study released Tuesday measured methane — a greenhouse gas — and ozone-causing compounds that were released from new natural gas wells in western Colorado.

The research, by Colorado State University professor Jeff Col

lett, didn’t measure the emissions’ health effects, but state officials will use the data in computer modeling to assess the risks, said Mike Van Dyke of the Colorado Department of Public Health and Environment.

“This study is incredibly useful,” said Van Dyke, chief of environmental epidemiology, occupational health and toxicology for the health department.

The state expects to hire outside researchers by the end of next month to begin modeling the human health risks, using the western Colorado research as well as data from a second study Collett is conducting at wells near the state’s urban Front Range.

The state risk study is expected to be completed in January 2018.

Collett’s study is the first time researchers have been able say with certainty they were measuring pollution only from drilling operations and not from other sources, Van Dyke said.

Continue reading story at The US News & World Report

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Heavy hitters expected to jump in for potential Colorado fight on proposed oil, gas ballot initiatives

DJ Basin Oil Drilling Rig - Image Credit - Encana Inc.

DJ Basin Oil Drilling Rig – Image Credit – Encana Inc.

Sharon Dunn – Greeley Tribune – June 11, 2016

As they say in sports, it could all come down to this one game.

Colorado’s November election could be a pivotal one for the oil and gas industry if voters are presented with questions to limit drilling in the state.

“One thing I’m not clear about is how this will run headlong in a collision (course) with the whole business of property rights. How far can they go in the name of local control, or state control? … I’m not sure you can amend a state constitution to obliterate a property right.— John Straayer, a political science professor at Colorado State University and political analyst

From the money the election would command, to the potential legal questions they could pose, to the implications for drilling across the country, a lot will be riding on petitioners’ abilities to collect signatures to place four issues on the ballot.

The initiatives would limit oil and gas drilling in local communities or give governing bodies rights to curtail such activities within their borders — measures that are sure to command millions of dollars in campaign spending. Many think this could easily be a $200 million election issue in Colorado this year.

“This will be one of the biggest environmental fights in the country this year,” said Lauren Petrie, Rocky Mountain region director for Food and Water Watch, a Washington, D.C.,-based group advocating for safety in food production and oil and gas production. “All eyes will be on the outcome for these Colorado ballot initiatives.”

Continue reading story at The Greeley Tribune

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USGS Estimates 66 Trillion Cubic Feet of Natural Gas in Colorado’s Mancos Shale Formation

A map showing the Mancos Shale and the USGS assessment units within the formation.

A map showing the Mancos Shale and the USGS assessment units within the formation.

June 8, 2016, This is the second-largest assessment of potential shale & tight gas resources that the USGS has ever conducted.

Note: in early 2013, a Mancos Shale study by the Colorado Mesa University stratigraphically calibrated the Upper Mancos, Prairie Canyon, Niobrara and Lower Mancos.

The Mancos Shale in the Piceance Basin of Colorado contains an estimated mean of 66 trillion cubic feet of shale natural gas, 74 million barrels of shale oil and 45 million barrels of natural gas liquids, according to an updated assessment by the U.S. Geological Survey. This estimate is for undiscovered, technically recoverable resources.

The previous USGS assessment of the Mancos Shale in the Piceance Basin was completed in 2003 as part of a comprehensive assessment of the greater Uinta-Piceance Province, and estimated 1.6 trillion cubic feet of shale natural gas. Continue reading “USGS Estimates 66 Trillion Cubic Feet of Natural Gas in Colorado’s Mancos Shale Formation” »

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Ballot proposal would ban oil & gas production from 90% of Colorado, says report

From COGCC Report - Example of 2500’ buffer (red areas) for both occupied structure AND area of special concern setback for 12 sections in Weld County. Existing active wells are shown in purple

From COGCC Study on Initiative 78 – Example of 2500’ buffer (red areas) for both occupied structure AND
area of special concern setback for 12 sections in Weld County. Existing active
wells are shown in purple

Denver Business Journal – May 27, 2016

A proposed ballot measure, No. 78, that calls for a mandatory 2,500-foot buffer zone around oil and gas operations, would, if approved by voters, effectively choke off oil and gas development across about 90 percent of the state of Colorado, according to a study released Friday afternoon by the Colorado Oil and Gas Conservation Commission.

Colorado currently ranks seventh in the nation for crude oil production, and sixth nationwide for natural gas production.

In the five counties that make up most of the oil and gas production in Colorado, the percentage of land where new oil and gas development would be banned is even higher under Amendment 78’s new wider setback zone, according to the COGCC’s study.

The COGCC is the state agency charged with regulating Colorado’s oil and gas operations. Continue reading “Ballot proposal would ban oil & gas production from 90% of Colorado, says report” »

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