Drilling in Colorado is funding exploration in the Permian Basin
By ALDO SVALDI – The Denver Post – August 28, 2016
PDC Energy last week said it plans to invest $1.5 billion in the Delaware Basin in west Texas — money it won’t have available to boost production in the Denver-Julesburg Basin northeast of Denver.
Late last month, Encana Oil & Gas completed a $900 million sale of its holdings in the D-J Basin to Crestone Peak Resources, ending a long-running commitment.
PDC Energy and Encana were the basin’s fourth- and third-largest producers. Their moves, one a diversion and the other a divorce, raise the question of whether more Colorado petroleum producers will seek their future fulfillment in other fields.
Executives with Noble Energy, Anadarko Petroleum and Whiting Petroleum — three other big players in the D-J’s Wattenberg Field — offered reassurances Thursday of their commitment to Colorado’s most prolific petroleum play.
“It is hard to not see it being a key, core area where we invest money,” Noble Energy chairman, president and CEO Dave Stover said during the Rocky Mountain Energy Summit in Denver.
“We are always looking at our core basins, and we are still committed to the D-J,” Craig Walters, vice president of Wattenberg operations for Anadarko, said in a separate interview.
Anadarko, based in The Woodlands, Texas, and Noble, based in Houston, are the top two producers in the D-J Basin. But they are also active in the Delaware Basin, a subset of the larger Permian Basin of west Texas.
“Economically, they are very competitive,” Stover said of the two areas.
When oil prices started falling sharply in late 2014 and into 2015, Anadarko, Noble and Whiting cut their capital budgets but directed a larger share of what remained into the D-J Basin. Noble directs about 40 percent of its capital investment to the D-J.