Oil prices spur Niobrara exploration

2011-03-24T00:00:00Z 2012-09-19T15:00:14Z Oil prices spur Niobrara explorationBy JEREMY FUGLEBERG Star-Tribune energy reporter Casper Star-Tribune Online

The oil is there, there's a way to get it, and now the money is right.

The price of oil surged past $100 a barrel recently, up from $80 a year ago.

While new technology makes that exploration and drilling potentially profitable, it's the good price of oil that keeps energy companies looking for the next big strike in the Niobrara Shale.

"When the price of a barrel of oil is $105 a barrel, you want to put as many barrels in the tank as you possibly can," said Mark Northam, director of the University of Wyoming's School of Energy Resources.

The price of crude oil should stay high throughout the year, according to the U.S. Energy Information Administration.

The average cost of crude oil should stay above $100 through the year as supplies tighten due to unrest in the Middle East, the analysts stated in a March 8 energy outlook.

Along with higher cost of oil, lower costs of production also mean that producers don't have to generate as much as in the past to make their wells pay.

Roger Parker, chief executive of the Denver-based Recovery Energy Inc., said his company can break even with relatively low production totals.

"We only need to recover 70,000 barrels of oil to achieve payout," he said.

EOG Resources' Jake 2-01H showed producers the potential of the Niobrara when it produced 50,000 barrels of oil in the first 90 days of production from its Weld County, Colo., site.

Northam said he would expect that if prices dropped back down to $60 a barrel, companies would likely slow down their pace of development in the Niobrara.

"I think the low costs (of production) are what have made this a play," he said. "The high value of the product is what's feeding the frenzy."


Reach Jeremy Fugleberg at 307-266-0623 or jeremy.fugleberg@trib.com. Read his blog at http://trib.com/news/opinion/blogs/boom/ and follow him on Twitter: @jerenegy.

Copyright 2015 Casper Star-Tribune Online. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

No Comments Posted.

Untitled Document

Civil Dialogue

We provide this community forum for readers to exchange ideas and opinions on the news of the day. Passionate views, pointed criticism and critical thinking are welcome. Name-calling, crude language and personal abuse are not welcome. Moderators will monitor comments with an eye toward maintaining a high level of civility in this forum. Our comment policy explains the rules of the road for registered commenters.

If your comment was not approved, perhaps...

  1. You called someone an idiot, a racist, a dope, a moron, etc. Please, no name-calling or profanity (or veiled profanity -- #$%^&*).

  2. You rambled, failed to stay on topic or exhibited troll-like behavior intended to hijack the discussion at hand.

  3. YOU SHOUTED YOUR COMMENT IN ALL CAPS. This is hard to read and annoys readers.

  4. You have issues with a business. Have a bad meal? Feel you were overcharged at the store? New car is a lemon? Contact the business directly with your customer service concerns.

  5. You believe the newspaper's coverage is unfair. It would be better to write the editor at editors@trib.com, or call Editor Jason Adrians at 266-0545 or Content Director David Mayberry at 266-0633. This is a forum for community discussion, not for media criticism. We'd rather address your concerns directly.

  6. You included an e-mail address or phone number, pretended to be someone you aren't or offered a comment that makes no sense.

  7. You accused someone of a crime or assigned guilt or punishment to someone suspected of a crime.

  8. Your comment is in really poor taste.

Add Comment
You must Login to comment.

Click here to get an account it's free and quick