DENVER—While the Williston Basin is the oldest and premier shale play in the Rocky Mountain region, great gains have been made outside of the Niobrara in the Denver-Julesburg (D-J) Basin and especially in Wyoming’s Powder River Basin.

“Most plays are ultimately going to be competing with and compared, including by investors, with the Permian Basin with its numerous producing horizons. And current prices have to be good for Rocky Mountain plays to complete with the Permian. For the Denver-Julesburg Basin, prices need to be really good,” said Trisha Curtis, president and co-founder of Denver-based boutique energy analytics firm PetroNerds.

Speaking as part of a panel discussion at Hart Energy’s DUG Rockies Conference & Exhibition, Curtis said the D-J Basin is a delineated play with plenty of continuing opportunities and low costs. There are infrastructure constraints including gas take away. There is also a looming election that could change the politics and investor pressure on profits and returns.

The Williston Basin is also delineated with known geology and completion growth opportunities. It’s benefitting from recent pipeline installations. The operators in the play are also under the same investor pressures and wells are held by production.


“The Powder River Basin has a massive amount of upside potential. It is a stacked play with many producing horizons and currently, few players,” Curtis said. “However, it isn’t a fully delineated play but the operators haven’t been pushed to drill and produce, which slows additional delineation. There is still a lot of acreage in the market that is for sale and still hasn’t been sold.”

The play, unlike the Permian, is more subject to current oil prices. The main players in the D-J Basin are Anadarko, Devon, PDC and Continental Resources. “It is interesting to note,” Curtis said, “that the key players here also have assets in the Permian Basin.”

“In the Bakken, gas production has doubled. It used to be a 1-to-1 ratio and that is because some of these wells are older, and some of the older and the newer wells produce more gas. Also, in the Bakken they’ve been drilling 2-mile long laterals for years.

“In the Powder River Basin, production is about 115,000 barrels per day, but most of that is coming from about 1,200 horizontal wells, which means that about 85,000 barrels per day from these horizontal wells,” she continued. “The Powder River Basin, unlike the Permian, has low water production. So far, it’s been dominated by publicly traded companies like EOG, Chesapeake and Devon, but there are smaller operators that are having good results.”

Curtis pointed out that Niobrara wells in the basin haven’t been that productive when compared to the Bakken, but if you look and the Parkman wells that were completed last year the production is very good. “Well costs are a little high, and so is the Permian until recently, but that will come down once the play is delineated,” she said.

Stephen Beck, senior director of North American Shales at Stratas Advisors, said that while the Permian Basin has been responsible for some of the largest gains in oil and gas production, plays in the Rockies have been a stable and steady producing area, “like a steady hand at the till, but there are a lot of signs of a growing asset.”

In December of 2017, noted Beck, the Bakken is producing a little more than 1 million barrels of oil per day. “But if you look at the same wells at the end of 2018, they are forecast to produce about 625,000 barrels per day, a 40% decline on base production. But the new Bakken wells that are predicted to come on line in 2018 will produce about 400,000 barrels per day. Decline in Wattenberg will be offset by Niobrara activity, not including the recent gains in the Powder River Basin. As Trisha mentioned, revived prices will also revive activity.”

Beck said of recent speculation in the industry regarding sweet spot exhaustion, “There are poor wells in the Bakken sweet spots and good wells outside the sweet spots and that is due to the heterogeneity that permeates these shales. However, Statas predictions indicate that we will run out of the sweet spot locations in the 2020s.”

He also noted that Whiting Petroleum said that they have good locations from decades and that they could be carried along in the play at $55 per barrel.

Breakeven costs in the Powder River Basin are competitive with any basin in the U.S. and this is partially due to low water cuts, especially compared to the Permian Basin.

“Large portions of Niobrara spending outside of Wattenberg will take place in the Powder River,” Beck said. “Other spending in the Powder River will likely aim to further development of the Parkman, the Sussex, the Shannon, Turner Sand and other members in the Powder’s evolving stack opportunity.”

Another boost to the region is the infrastructure takeaway capacity, which has changed over the years. In 2013, there was just under a million barrels per day and in 2018, it’s about 2.5 million barrels per day. Meanwhile, pipeline capacity, including for gas, isn’t expected to increase.

“But the Rockies will still have low water cuts, predictable, manufacturing-type drilling and completing operations. It still attracts capital even though the “land grab” is over—if you look to but contiguous acres in the Powder River, good luck,” Beck said.

Larry Prado can be reached at lprado@hartenergy.com.