Oil production the DJ-Niobrara collapsed by 1/3rd in the span of just 13 months, due to the fewer completions and high decline rates.

Recently some rigs have returned to the basin, so in our latest post we share what that means for the outlook

This article contains still images from the interactive dashboards available in the original blog post. To follow the instructions in this article, please use the interactive dashboards. Furthermore, they allow you to uncover other insights as well.

Visit ShaleProfile blog to explore the full interactive dashboard

These interactive presentations contain the latest oil & gas production data, from all 9,202 horizontal wells that started production in the DJ-Niobrara since 2009/2010, through December.

We needed a bit more time with the latest data on the Permian, so that post is now planned for Friday or early next week. It has been almost a year since we last covered the DJ-Niobrara in a post, so what has happened here since?

Total production

Oil production in the DJ-Niobrara fell by almost 1/3rd from 579 thousand b/d to 390 thousand b/d in the 13 months from the peak in November 2019 through December last year. The wells in this area have high decline rates and in 2020 fewer than half the number of wells were completed (588) than in the years before. December production was the lowest level in over 3 years.

Natural gas production has fared much better (toggle ‘product’ to gas), and came in at 2.8 Bcf/d last December, not far below the previous peak (3.1 Bcf/d).

Supply Projection dashboard

The number of drilling rigs has increased again from just 1 in Q3 last year to 7 as of last week (according to the Baker Hughes rig count). What does that mean for our outlook of the basin? Let’s take a look at our Supply Projection dashboard, which Bloomberg use for this story last week in order to show what would happen with US tight oil if the number of rigs would double this year:

Projected tight oil supply in the DJ-Niobrara, assuming no changes in rig count and productivity.

As you can see in the bottom graph, despite the increase in rig count, more declines are expected as the current number only supports a production level of around 300 thousand bo/d.

Well productivity

In the ‘Well quality’ tab you’ll find that well productivity has not changed by much since 2017.

Top operators

Two years ago, Occidental purchased Anadarko and more recently Chevron acquired Noble. Those acquisitions have made them the top producers in this basin (see “Top operators”), followed by PDC and Extraction Oil & Gas.

Advanced Insights

The ‘Advanced Insights’ presentation is displayed below:

This “Ultimate recovery” overview shows how these horizontal wells are heading towards their ultimate recovery. They are grouped by the year in which production started.

This reveals (by extrapolating the curves) that more recent wells will recover just shy of 200 thousand barrels of oil, before declining to below a production rate of 10 bo/d, on average.

Finally

Our post on the Permian will probably be up by Friday.

Production data is subject to revisions.

Sources

For this presentation, I used data gathered from the following sources:

  • Colorado Oil & Gas Conservation Commission
  • Wyoming Oil & Gas Conservation Commission
  • FracFocus.org

Visit our blog to read the full post and use the interactive dashboards to gain more insight: https://bit.ly/30MQHcL

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Twitter: @ShaleProfile

LinkedIn: ShaleProfile

Facebook: ShaleProfile

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