The oil and gas industry continues its investment in the Denver-Julesburg Basin north of Denver is continuing in 2014, with two companies announcing that they'll each spend several hundred million dollars in the area next year.
The area has boomed in recent years as hydraulic fracturing and horizontal drilling have allowed energy companies to get to oil and natural gas liquids resources. Geologists have long known the reserves were there, but previously they were considered to hard and too expensive to reach.
As drilling rigs have moved into the area, Colorado’s oil production in 2012 broke a 50-year record – a trend that’s likely to continue as energy companies pour more money into the region.
The basin’s two biggest oil and gas companies – Texas-based Anadarko Petroleum Corp. (NYSE: APC) and Noble Energy Inc. (NYSE: NBL) – both have said they plan to spend $1.7 billion – each – in the area in 2013. Noble executives have said the company plans to invest $10 billion in the basin in by the end of 2018.
And now, two companies other companies working in the area – Encana Corp. (NYSE: ECA), based in Calgary, Alberta, Canada, and Denver’s PDC Energy Inc. (Nasdaq: PDCE) – have detailed their spending plans for 2014, including the money they have earmarked for Colorado’s northern Front Range. Both companies said they will focus on producing more oil and natural gas liquids in the upcoming year.
Encana officials said the company plans to spend between $2.4 billion and $2.5 billion in 2014 in five locations. The money will be spent on five locations that are rich in oil and natural gas liquids and Encana said it hopes to grow its production of those two commodities by 30 percent next year, compared to 2013. Three of the five assets Encana plans to focus on are in the United States – including the DJ Basin north of Denver, the San Juan Basin in New Mexico, and the Tuscaloosa Marine Shale in Louisiana and Mississippi. In the DJ Basin, Encana said it planned to spend between $250 million and $300 million in the area. The company said it will run between four and six drilling rigs in the basin and drill between 40 and 50 wells next year. Denver’s PDC Energy also announced its spending plan for 2014. The company said it plans to spend about $647 million during the year, targeting the company’s “high-return, liquid rich projects” in the Wattenberg Field, part of the DJ Basin north of Denver, and the Utica Shale in Ohio. About 72 percent, or $469 million, will be invested in the Wattenberg Field, part of the DJ Basin north of Denver, the company said. PDC said it plans to start the year operating four horizontal drilling rigs in the area north of Denver, and will add a fifth drilling rig during the second quarter. The industry figures that each drilling rig supports about 100 jobs, both on the rig and in support positions. PDC said it aims to drill about 115 wells during the year, of which 19 will have “extended length lateral completions” of about 7,000 feet, or extend will over one mile in length.
