Four Wells Coming Off Confidential List; COP Sells Niobrara Assets -- November 27, 2019

First things first: Dow, S&P 500, and NASDAQ all hit intra-day all-time highs. 3Q19 GDP is revised upward, now over 2% at 2.1%.

Rig counts don't matter: rigs continue to drop; production continues to increase.

MDU feeling flush: will increase 5-year CAPEX by 8.6%. This speaks volumes about the future of the Bakken.

Kashagan cuts production: maintenance or something of that sort. 

COP sells Niobrara, link here:

One of the biggest international oil giants is selling its oil and gas lease rights at the northeast edge of the metro area in a deal poised to make Denver-based Crestone Peak Resources much bigger. Houston-based ConocoPhillips Co. said Tuesday that it has negotiated the deal. Niobrara refers to geological formation that’s most sought after for unconventional oil and gas development in northeast Colorado.

Financial terms not disclosed.

Crestone Peak revealed Monday that it had struck a deal to buy 97,000 acres of oil and gas lease rights in Adams and Arapahoe counties and in the city of Aurora, nearly tripling the company’s size in the southern Denver-Julesburg Basin.

The deal includes the Lowry Range, a former military bombing range east of Aurora, and some ConocoPhillips acreage in northern Douglas and Elbert counties, too.

The Niobrara is tracked at the sidebar at the right.

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Back to the Bakken

Active rigs:

$58.40	11/27/2019	11/27/2018	11/27/2017	11/27/2016	11/27/2015
Active Rigs	56	62	54	37	64

Four wells coming off confidential list today -- Wednesday, November 27, 2019: 93 for the month; 194 for the quarter:

• 36137, SI/NC, XTO, Sorkness State Federal 34X-36H, Sorkness, no production data,
• 35639, SI/NC, WPX, St. Anthony 9-16HX, Mandaree, no production data,
• 35547, 2,041, CLR, Carus 7-28H, Cedar Coulee, t8/19; cum 138K 9/19;
• 30107, 820, Oasis, Jensen 55-1 43-7 5B, Missouri Ridge, t6/19; bcum 84K 9/19; 

RBN Energy: Noble Midstream's crude gathering systems in the D-J Basin, part 2.

The doubling of crude oil production in the Denver-Julesburg Basin over the past 18 months spurred a rapid build-out of crude gathering systems and other infrastructure. Unlike the sprawling Permian Basin, with its numerous centers of drilling and production activity in parts of West Texas and southeastern New Mexico, the vast majority of the D-J Basin’s incremental crude output has come from Weld County, CO. Understandably, Weld County also is where most of the D-J’s crude gathering systems are located, and where most of the gathering system expansions are being planned and built. Today, we continue a series on existing and planned pipeline networks to move D-J crude from the lease to regional hubs and takeaway pipes.

Previously, we explained that the D-J Basin in northeastern Colorado and southeastern Wyoming offers an unusually intense concentration of hydrocarbons within four geologic layers, or “benches,” only a few thousand feet below the surface, as well as low per-well drilling costs and direct pipeline access to the crude hub in Cushing, OK. We also pointed out that the rate of crude oil production growth in the D-J Basin in 2018-19 has been second only to the Permian, and that D-J production now averages about 640 Mb/d. To kick off our review of crude gathering systems in the D-J, we started with the play’s largest network: the Black Diamond system in Weld County, which is jointly owned by Noble Midstream Partners and Greenfield Midstream.

Noble Midstream is a master limited partnership (MLP) formed in 2016 by Noble Energy, one of the largest producers in the D-J; Greenfield Midstream, in turn, is a privately held midstream developer and owner. Black Diamond currently has about 240 miles of gathering pipe and 390 Mbbl of crude storage capacity; another 30 Mbbl of storage will come online in the first quarter of 2020. Nearly a dozen customers have dedicated a total of about 286,000 acres to the system, whose crude oil flows now average about 130 Mb/d. Finally, we noted that Black Diamond recently secured an option to purchase up to a 20% ownership interest in the Saddlehorn Pipeline, one of the big crude conduits linking the D-J and Cushing; that option expires in April 2020.