Crude oil production in the Rockies’ Niobrara region is up by more than 50% since the beginning of last year, spurred on by higher oil prices, ample oil pipeline takeaway capacity, and other positive factors. Natural gas and NGL production in the Niobrara — which includes both the Denver-Julesburg (D-J) Basin and the Powder River Basin (PRB) — has been rising too, to the point that there’s a scramble on to develop new gathering systems, gas processing plants as well as gas and NGL pipeline capacity. A number of exploration and production companies are upbeat about the region’s prospects; so are some midstreamers. But there’s a dark cloud on the horizon — at least in Colorado, where voters will decide in a few weeks whether to significantly restrict where new wells can be drilled. Is the Niobrara poised for continued growth or not? Today, we kick off a new series on Rockies production, infrastructure and prospects.
Crude Oil TradeView provides up-to-date data and insights into the behavior of differentials for 33 crude assessments across North America. Each week, it also walks you through the reasoning of why differentials widen, narrow, flip (premium vs. discount), or blow out.
If your knowledge of the U.S. Rockies is limited to Coors beer, good skiing spots and Denver’s sports teams, the Niobrara’s D-J Basin and PRB offer what are currently believed to be the region’s most productive and promising hydrocarbon reserves. Now if we could only get folks to agree on exactly what is meant by the term “Niobrara.” After all, it can mean (1) a geological formation that underlies much of the Great Plains of the U.S. and Canada, (2) a shale producing basin in Northeast Colorado, Northwest Kansas, Southwest Nebraska and Southeast Wyoming, and (3) a geographic area that includes the D-J and the PRB. For our purposes here, Figure 1 shows how RBN models the extent of the Niobrara surface geography, with the D-J Basin including most of northeastern Colorado (brown area) and four counties in southeastern Wyoming (dark pink area). The PRB, in turn, includes six counties in northeastern Wyoming and two in southern Montana (green area). That’s our definition and we’re sticking to it.
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About the song
“Rocky Mountain High” was written by John Denver and Mike Taylor and appears on Denver’s sixth studio album of the same name. The Milt Okun-produced single was recorded in August 1972 and released in October of that year. It rose to #9 on the Billboard Hot 100 and #3 on the Adult Contemporary charts. The song was inspired by Denver’s move to Aspen, CO, in the late 1960s, and his love for the state. It is one of Colorado’s two official state songs, the other being “Where the Columbines Grow.” (Denver wrote another official state song, “Take Me Home, Country Roads,” one of four state songs of West Virginia.)
John Denver (Henry John Deutschendorf Jr.) was an American singer-songwriter, record producer and actor. He released 25 studio albums, sold over 33 million records worldwide, and has 12 gold and four platinum records. His career took off when his “Leaving on a Jet Plane” became a #1 hit for Peter, Paul and Mary on the Billboard Hot 100 in 1969. Denver has won one American Country Music Award, two Country Music Association Awards, one Emmy and two Grammys. He was selected poet laureate of Colorado in 1977, and inducted into the Songwriters Hall of Fame in 1996. Denver died in a plane crash in 1997.
