Wyoming’s Powder River Basin has not lost its shine or momentum for two of Wyoming’s largest independent firms, EOG Resources and Anadarko Petroleum, as uncertainty in Colorado politics threatens oil and gas’s future in the state.
In recent calls with investors to discuss quarterly earnings, the two firms extolled the Wyoming basin and spoke openly of their separate commitments to the play, from EOG’s planned spending on pipelines to Anadarko’s view of where to expand in the largely consolidated eastern Wyoming oil field.
Anadarko executives shrugged at the uncertainty over Colorado’s potentially dramatic increase to setback distances from homes, parks and other dwellings in a call with investors Wednesday.
That citizen initiative will come up for a vote Tuesday. An outcome against industry would, hypothetically, shut off oil and gas development in the state going forward and likely push drilling investments into Wyoming where Anadarko is well-established.
“We’ll see what the voters do between here and next week,” CEO Robert Walker said. “A lot of information flowing around, I’m not sure which of it is accurate and which of it’s not. But we’ll know by this time next week where we are.”
Walker went on to say that he didn’t believe it affected the company’s overall growth goals for the coming year given the multiple plays where the company can pivot.
“We do have a lot of flexibility,” he said. “We do have a plan that we will move to if we, in fact, find ourselves needing to.”
The Woodlands, Texas-based Anadarko reported net income of $363 million from July to September. It spent $75 million during the quarter picking up mineral and royalty interests in the Powder River Basin; those holdings are in addition to Anadarko’s firm position in the southern PRB, executives noted.
The investment will improve the economics of the play but do little to change Anadarko’s current working interest in the PRB, said Daniel Brown, executive vice president of U.S. onshore operations.
The land battle in the PRB is nearly over for Anadarko.
“As we look across the basin, a substantial amount of consolidation has already occurred,” he said. “There may be one or two incremental opportunities for us moving forward to bolt onto our position. And certainly as those raise their heads, we’ll evaluate whether or not it makes sense for us to do those.”
Another other significant player in the Powder, EOG Resources, completed 11 net wells in the PRB during the third quarter and brought a total of 20 wells online including 13 in the popular Turner formation. It also started production on 25 wells in the DJ Basin in southern Wyoming.
It was an astonishing quarter for the company in general. The Houston-based firm reported net income of $1.2 billion, up from $101 million in the third quarter of last year.
Like Anadarko, EOG noted its attention to the Powder. EOG was the only company that continued drilling during the worst of the crude price downturn of recent years. That work appears to be paying off as the company continues to drive down drilling costs and wade into more challenging plays like the Mowry formation. EOG drilled two wells in the bentonite-laced Mowry during the third quarter.
“In the early life of any new play, this tends to be an iterative process as we collect data and rapidly integrate the new information on a go-forward basis,” said David Trice, executive vice president of exploration and production, in a call with investors Friday.
EOG plans to develop additional infrastructure in the PRB, one of the missing elements in the developing basin.
“In summary, we’re planning for long-term, high-return growth out of the Powder River Basin,” Trice said. “The newest addition to our portfolio of premium assets.”