Crude Oil Price by

Oil and Gas Energy News Update

Monday, July 18, 2011

Mid-year Well Permitting Set to Surpass 2010 Numbers in N. Colo. County

- Mid-year Well Permitting Set to Surpass 2010 Numbers in N. Colo. County

Monday, July 18, 2011
Greely Tribune, Colorado
by Sharon Dunn, Greeley Tribune, Colo.

Weld County oil and gas drilling permits are already taking over last year's pace, but that's just part of the picture.

Oil and gas drilling activity is at one of the highest levels in years, not only when it comes to drilling permits, which are good for two years, but actual activity.

Though evidence is apparent in the many oil and gas trucks burning a path along U.S. 85, it's also just as busy in the county recording office as it was last year.

Gaye Florio, the manager of the recording department at the Weld Clerk and Recorder's Office in north Greeley, said landmen still line up daily to research land titles on the office's computer systems. It's been the same story since early 2010, shortly after a well named "Jake" in northern Weld County spewed its riches, and subsequently touched off the fury to get the most out of the Niobrara shale formation.

"It hasn't changed. We've got people waiting now," Florio said Thursday morning. "We get new people all the time anymore. There for a while, we had the same (people) over and over, and now it's different all the time."

As of July 12, halfway through the year, the number of drilling permits issued in Weld County hit 1,195 -- a 32 percent increase in the last month -- easily topping the number of drilling permits throughout the state. The permit numbers are on track to surpass last year's 2,152 permits issued in Weld.

Though permitting is not the whole story, when it comes to activity, it is a good measure, said Thom Kerr, permitting manager with the Colorado Oil and Gas Conservation Commission, which evaluates permit requests and issues them.

"It is a good barometer, because it shows (oil companies') interest. If they're not interested, they're not going to file permits. At any time, we could have a huge flurry of permits, which we have," Kerr said. "We've been receiving over 100 permits a week for the last month."

The more interesting item for Kerr halfway through this year is the number of active drilling permits that have yet to do be acted upon. Permits are good for two years. As of June 16, the number of active permits was at roughly 5,000.

"That's 5,000 that have not been consummated or haven't expired, or haven't been drilled," Kerr said. "Those will keep them busy for a little while."

By the first week of July, Weld County had 33 rigs operating, almost half the state's 75 active total active rigs.

"You're seeing a lot of that," Kerr said. "That's why the permit activity probably isn't really reflective of the current level of drilling activity."

Since "Jake" spewed in late 2009, oil companies have flocked to the area to buy up leases and try their luck at the tight shale 7,000 feet below the surface.

The well also heralded a new wave of horizontal drilling activity, which is already setting records, and now sits at 26 percent of all drilling activity in the state, with the majority of horizontal wells in Weld.

Of the 378 horizontal drilling projects permitted so far this year, 309 are in Weld County. Last year, there were 462 horizontal wells permitted, 321 of which were in Weld. But only 151 of those wells were completed, meaning more is to come.

"Clearly it will be a record year for horizontal drilling," Kerr said. "No doubt, it's very high activity. If you look, 26.1 percent of all permits are horizontal. That's just so impressive. It had not been envisioned until the Niobrara touched that off. To get that resource, you need to drill it horizontal. It's the way to do it."

And because of the renewed interest in the Niobrara, Weld County numbers surpassed Garfield County for the second year after consistently coming in No. 2 in the state for years.

The activity has even prompted the Weld Clerk and Recorder to seek a part-time employee to make copies for the flocking land researchers.

"We have 10 machines, and we have nine to 10 where we've let them bring in their own computers," Florio said. "They're here all the time."

Copyright (c) 2011, Greeley Tribune, Colo. Distributed by McClatchy-Tribune Information Services.

Oil & Gas Post

Promote Your Page Too

No comments:

Post a Comment