Occidental brings drilling rig back to Colorado after oil well permitting picks up | OXY Message Board Posts


Occidental Petroleum Corporation

  OXY website

OXY   /  Message Board  /  Read Message

 

 






Keyword
Subject
Between
and
Rec'd By
Authored By
Minimum Recs
  
Previous Message  Next Message    Post Message    Post a Reply return to message boardtop of board
Msg  399 of 409  at  11/10/2022 11:20:29 AM  by

jerrykrause


Occidental brings drilling rig back to Colorado after oil well permitting picks up

American City Business Journals
  Denver Business Journal
 
 

Occidental brings drilling rig back to Colorado after oil well permitting picks up

 By – Senior Reporter, Denver Business Journal
 

Colorado’s biggest oil producer brought a drilling rig back to the Denver-Julesburg Basin, reversing its decision to its cut its well development in half this year due to slow state permitting.

Houston-based Occidental Petroleum recently added a second drilling rig working in Weld County oil fields, restoring one it had reassigned to Texas this spring because it now can keep multiple rigs busy enough in Colorado to justify the investment.“I think the success we’ve had with our permitting has given us a strong runway on those very competitive projects,” said Richard Jackson, president of Occidental’s U.S. onshore oil production and carbon management, during a Wednesday earnings conference call with industry analysts.

Occidental, the largest oil producer by volume in the state, relocated one of the drilling rigs it had active in Colorado and Wyoming to Texas after concluding the company had enough work in northeast Colorado for only one rig.

The company told analysts then that the number of permits and the pace of approvals it could rely on in Colorado didn’t economically support keeping the rig in Weld County when an additional drilling crew could immediately work in Occidental’s acreage in the Permian Basin.

The company reached that conclusion after the Colorado Oil & Gas Conservation Commission rejected part of a 33-well Occidental project in Firestone that would’ve placed some wells within 2,000 feet of homes.

Occidental predicted the rig could come back to the Denver-Julesburg Basin in 2023 if COGGC permitting for some proposed new projects came through.

The company has been winning permit approvals lately, and Occidental now has the second drilling rig back in Colorado sooner than expected.

Since April, the COGCC has approved 50 permits to drill new wells for Occidental, plus the go-ahead for a trio of multi-well project locations for which Occidental expects expedited review and likely approval for many more drilling permits.

In August, the COGCC also approved a 24,331-acre, 209-well project for an Occidental subsidiary, Kerr-McGee Oil & Gas Onshore, on a single cattle ranch spanning 34 square miles of remote Weld County outside the town of Roggen.

That project was the first large-scale oil development project approved by the COGCC since reformed and tighter drilling regulations took effect for oil and gas companies in early 2021.

The COGCC has since then approved large-scale drilling plans in the basin for Chevron Corp. (NYSE: CVX), a project in its Wells Ranch area east of Greeley, and for a subsidiary of Denver-based Civitas Resources Inc. (NYSE: CIVI) on land south of Denver International Airport in Aurora.

For Occidental, there’s enough well-drilling permitted to keep that second rig busy in Weld County for foreseeable future.

Occidental’s third-quarter production fell 7.5% in the Rockies compared to the same quarter last year.

Occidental’s oil, liquids and natural gas equivalent output totaled 270,000 barrels per day in the third quarter, compared to a 292,000 barrels-per-day average in the third quarter of last year.

Having the second rig operating in the state should bolster the company’s output in the months ahead.

Occidental expects to spend about $400 million this year drilling wells in its Rockies region, about 85% of which is dedicated to Colorado and the remainder to the Powder River Basin in Wyoming.

The oil giant operates in Texas, the Gulf Coast and internationally, too. Overall, Occidental’s production is up this year.

Occidental this week reported $2.5 billion in third-quarter profits from $9.5 billion in sales, the fourth consecutive quarter with billions in profits driven by the high price of crude oil and natural gas.

The company is not increasing spending to expand its oil production despite the prospect of continued high prices.

The company’s wells are producing more efficiently. Occidental’s companywide output of nearly 1.2 million barrels of oil and natural gas equivalents per day is up compared to 2021.

Occidental views buying back company shares to lift its stock price as a better use of cash to benefit its investors than increasing its drilling budget to raise oil and gas production, said CEO Vicki Hollub during Wednesday’s conference call.

“Growth is not the target,” Hollub said of the company’s production plans. “It’s to build the best wells in the best way.”

Occidental foresees keeping its well development spending flat for 2023. Production volumes next year will be similar to what Occidental is producing by the end of 2022, the company predicted.

 


     e-mail to a friend      printer-friendly     add to library      
|  
Recs: 0  
   Views: 0 []
Previous Message  Next Message    Post Message    Post a Reply return to message boardtop of board




Financial Market Data provided by
.
Loading...