Posted on 09/15/2014 5:54:36 AM PDT by thackney
The Powder River Basin, well known for its abundant coal supply, is experiencing a turnaround in oil production. Production has rebounded from a low of 38,000 barrels per day (bbl/d) in 2009 to 78,000 bbl/d during first-quarter 2014. Although U.S. oil production growth is occurring primarily in the Bakken, Eagle Ford, and Permian Basins, the Powder River Basin is among other regions of the country that have also benefitted from the application of horizontal drilling and hydraulic fracturing.
The increase in Powder River Basin oil production is largely attributable to production growth in the Turner, Parkman, and Niobrara-Codell formations, which collectively increased from 4,700 bbl/d in 2009 to 36,300 bbl/d in first-quarter 2014, increasing their share of total Powder River Basin oil production from 12% to 46%. Three other formations—the Shannon, Sussex, and Frontier—also rose from 2009 to 2014, although to a lesser extent, rising from 8,900 bbl/d in 2009 to 17,000 bbl/d in first-quarter 2014, maintaining their share of total Powder River Basin oil production at around 23%.
The Powder River Basin encompasses more than 43,000 square miles and is located primarily in northeast Wyoming and southeast Montana, along with small areas of South Dakota and Nebraska. The recent resurgence is occurring predominantly in the Wyoming portion of the basin, which is also the main source of the Basin's historical oil production. Since January 2009, more than 590 oil wells have been drilled and completed in the six select formations within the Powder River Basin, with this activity centered in Wyoming's Converse and Campbell counties.
In the past, oil production came from the higher-permeability portions of Wyoming's Turner, Parkman, Shannon, Sussex, and Frontier formations. With the application of horizontal drilling and hydraulic fracturing, larger portions of these formations have become profitable for commercial oil production. In contrast, the Niobrara-Codell formation was not a significant oil producer in the Powder River Basin before 2009, and oil production from this formation is entirely reliant on the application of current petroleum technology.
Great update - TY
Oil well service is starting to boom again in Campbell County. There are many rigs in operation along Hwy 387 in Wright, WY. Douglas WY. is booming also from what I hear.
Are refinements in the extraction process lowering costs? Or is this a brute force procedure that requires $100 oil to be profitable?
I would say cost to produce oil in these tight formations have lowered. Not to say they have become cheap, but average costs in places like the Bakken appear to have lowered some.
http://www.reuters.com/article/2014/04/02/energy-crude-bakken-idUSL1N0MU21Z20140402
Thanks. $58 is pretty competitive with some offshore wells.
Keep in mind the phrasing they used:
“in the best areas of the Bakken shale oil play as low as “
That doesn’t mean typical or average cost.
We had occasion to visit the Rio area last month and happened to notice two deep sea oil rigs parked nearby. The locals seemed to think that they were there for maintenance purposes - not permanent installations. Do you have current information as to what is happening now off the coast of Brazil?
There are 29 offshore rigs reported as actively drilling offshore Brazil.
http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-rigcountsintl
Brazilian offshore industry hit with tax assessments
http://www.lexology.com/library/detail.aspx?g=f58cfc4d-1fa2-4e94-9ed8-5d3cf01af832
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