Non-Traditional States Seeing New Growth With Unconventional Wells
Since the beginning of the shale oil and gas boom, states such as North Dakota, Montana, Pennsylvania and Texas have been the stars of an ever-growing story about energy source success.
For the states that have been experiencing the shale oil boom from the early days, there has been extraordinary growth, increased revenues and jobs out numbering the qualified applicants willing to go to work in the energy sector.
While many states have found themselves on the outside of that energy boom in the U.S. looking in, there has been a growing drumbeat for many states that have opened up their lands for exploration in the hopes their state may have an unknown deposit of natural gas or shale oil. Indeed, for many states who might only hope to strike the energy jackpot with a successful well site that grows into hundreds of sites, the reality of striking it rich on an unconventional play is becoming reality.
When producers find an area filled with untapped potential, no different than what occurred in North Dakota a few years ago, it's important to ensure they are equipped to manage the increased competition for precious real estate. They must also have the resources and infrastructure in place to support rapid expansion in drilling and production, which isn't always guaranteed.
A lack of initial investment and preparation can mean falling behind the curve and missing the opportunity to capture the resources essential to success.
In Colorado, a number of companies are investing in exploration, research and development in order to tap into the state's oil and gas reserves. Anadarko Petroleum Corp. is one of the biggest companies working in Colorado's Denver-Julesburg Basin.
Anadarko Petroleum Corp. has announced plans to drill more than 360 wells in that basin this year, a 335-well increase over 2013 wells. For Lario Oil & Gas Co., their $600 million credit facility has been established to fund increased drilling in Colorado and other potential U.S. locales.
Lario has vast experience running plays in the most notable arenas of North Dakota and on Mid-Continent properties, but as horizontal drilling and hydraulic fracturing continue to unlock vast resources, states like Colorado have come into the sights as a target.
Investments into Colorado's oil and gas industry date back to late last year. In December, Noble Energy announced it was spending roughly $2 billion in Northern Colorado's Denver-Julesburg Basin. This kind of investment is notable because it has proven to be worthwhile from the investment standpoint.
In Michigan, a state that would not seem to fit the profile of a growing energy-rich stomping ground for natural gas and oil deposits, there has been a push to invest in a new process that is as unconventional as the oil deposits it seeks to unlock.
The non-traditional process pumps excess carbon dioxide, liquidize it and inject it into abandoned oil fields, filling the porous rocks beneath with the CO2 and flushing out the remaining oil. The technique has been used to retrieve 1.6 million barrels of oil that would otherwise not have been captured.
According to Bob Mannes, president and CEO of Core Energy LLC, the potential in Michigan is tens of millions of barrels. The CO2 used in the unconventional shale oil wells comes from operations in the Northern Michigan region.
This type of unconventional thinking and use of new methods will go a long way in future volume production from old and new wells.