Drive to Pine Tree Junction — the intersection of state highways 50 and 387 in Campbell County – and you will find yourself in the middle of an oil boom.
Tall drilling rigs dot the rolling hills. Crude-oil trucks with license plates from Oklahoma, Colorado and North Dakota move along the roads. They take the black gold from the new wells to shipping stations that connect to pipelines, said Don Schuh, president of Gillette-based Northern Production Co., an oil service company.
“I’m sure a lot of wells will be put on pipeline, but in the interim, they’re shipping by truck,” he said.
State data confirms the boom. According to the Wyoming Oil and Gas Conservation Commission, oil from the Powder River Basin accounted for nearly a third of the state’s production, from the beginning of the year through Friday.
In that time, Campbell County produced 5.5 million barrels, or 19.4 percent of the state’s oil production. Converse County produced 3.5 million barrels, or 12.3 percent of the state’s production.
Campbell County Commission Chairman Dan Coolidge, who has owned producing wells, said all the new wells in the basin are drilled vertically and horizontally, and producers use the technique of hydraulic fracturing to bust open rock and free oil.
“It’s kind of been under the radar,” Coolidge said.
About two years ago, the oil and gas industry was abuzz about oil from the Niobrara Shale formation in Goshen, Platte and Laramie counties. While the Niobrara play has been booming in Northern Colorado, it hasn’t boomed in Wyoming. Meanwhile, hundreds of miles to the north, the Powder River Basin boomed quietly, Coolidge said, and only now are people taking notice.
Coolidge and Schuh said the PRB boom is concentrated in three areas: Eastern Campbell County near the Johnson County line; from the Campbell County community called Savagetown, past Pine Tree Junction to Ross Road, north of Glenrock; and south of the town of Wright to north of Douglas.
Coolidge said that oil companies are drilling thousands of feet below the surface, targeting formations called Niobrara, Turner-Frontier, Teapot, Parkman and Muddy. The formations range in depths of 6,600 to 14,800 feet, according to Wyoming Oil and Gas Conservation Commission records.
The oil boom in Campbell County has helped offset lower revenues from natural gas, which has been selling at lower prices in the past year. The oil boom has not offset losses from coal tax revenues, Coolidge said.
The boom has kept Schuh’s company busy, he said.
He owns rigs and crews that prepare wells for hydraulic fracturing — a key industry method — or do finishing work after the practice, sometimes called fracking. He has rigs in Gillette, Casper and Roundup, Mont., and in the last
18 months increased employees from 64 to 145.
He expects the boom to continue – “as long as oil prices hold out,” he said.
In Converse County, three companies are building oil transfer stations, and a new field is planned for development.
Gazelle Transportation Inc. of Bakersfield, Calif., intends to build a station near Douglas where up to 4,000 barrels of locally produced crude a day will be unloaded from semitrailer trucks and injected into a Sinclair Oil pipeline. A subsidiary of Genesis Oil called Pronghorn Rail Services will move the equivalent of up to 5,000 barrels of locally produced oil a day from truck to rail and pipeline north of Douglas.
Enserco Midstream, LLC is expected to move up to 120,000 barrels of oil a day from trucks to a railroad south of Douglas. The oil would come from Converse County, North Dakota’s Bakken shale formations and Canada.
The Bureau of Land Management has made public a draft Environmental Assessment for the Scott Field, which Tulsa, Okla.-based Samson Resources wants to develop about 20 miles north of Douglas. The 44,619-acre field has had extensive oil production in the past, according to the BLM.
Samson told the BLM it would build up to 40 additional well pads, with between two and six wells drilled from each pad. There would be up to 150 wells, according to the BLM.
A spokeswoman for Samson did not return a call from the Casper Star-Tribune.
Converse County Commission Chairman Jim Willox said that a handful of companies have told commissioners they are still exploring in Converse County.
“Many of them are still finding exactly the best places to be, buying up leases and finding rigs,” he said. “We fully anticipate there will be exploration and production next year and project it for several years forward.”