Powder River Revival | Russell T. Rudy Energy LLC
The energy industry is nothing new to the Powder River Basin, but until recently coal had been the major producer in this remote corner of Northeast Wyoming. However, falling coal prices, low break even points, and high acreage costs in premier plays, are all driving oil and gas operators to the area. While mineral rights have skyrocketed from $1,000 an acre to $17,000, that is still well below the Permian Basin of West Texas and Southeast New Mexico where $60,000 an acre is not unheard of. However, like the Permian Basin, the Powder River offers the potential for stacked layers of oil and gas bearing rock.
All these factors have combined to make the Powder River Basin one of the hottest exploration and production plays in the U. S. From family enterprises such as Kirkwood Oil and Gas, to private equity firms, to big explorers such as Chesapeake Energy and EOG Resources, they all see the area as full of potential. While Campbell and Converse counties have been producing oil and gas for decades, the area was largely overlooked during the shale revolution. While there are only a handful of new wells so far, they are prolific, and industry observers feel that the early results are repeatable.
Further development might be initially handicapped by lack of infrastructure, but Meritage Midstream Services has bought pipelines and processing facilities in the area and plans to double gas processing capacity and add 425 miles of pipelines.
EOG is one of the operators who feel that all the pieces are in place for success. It has spent $2.5 billion to increase its acreage position to 400,000 and plans to drill 30 new wells next year. While development is still in the early stages, optimism is in the air.
To read the article in its entirety, please go to http://www.worldoil.com/news/2017/6/6/wyomings-powder-river-basin-a-bargain-compared-to-pricey-permian .
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