What is the biggest takeaway challenge in the Bakken and Niobrara?

The biggest takeaway challenge in the Bakken is competition from other plays, specifically the Eagle Ford and Permian.

With so much production growth from those two plays and given their proximity to the US Gulf Coast, moving the Bakken south the Gulf Coast can be challenging. The Bakken will require flexibility in takeaway so that it can get to the coastal markets, so it is a pipe, rail, and barge solution.

For the Niobrara, it is at an inflection point, and production is starting to ramp up significantly. The Niobrara is well poised to reach various end markets, including the Gulf Coast via Cushing, and the West Coast via rail. The challenge for the Niobrara is growing overall takeaway capacity just so barrels get out, and then getting the option to get to premium coast markets via rail.

What do you feel are the main drivers for the recent production increases in the Niobrara?

Technology and good economics! The reason for the big production increases in the Niobrara is that producers have come a long way to figuring out how to unlock the vast potential of that play.

The Niobrara has more complex geology than other shale plays, and so it has taken some more time to figure out how to optimize that development. Given producer’s huge increase in productivity per well, and the having some of the best economics of all plays in North American have generated the huge uptick in production.

How do you feel the recent production shifts have impacted the surrounding areas in Colorado?

According to the Colorado Oil and Gas Association, there are about 50,000 directly jobs in oil and gas and 100,000 indirect jobs. So, large employment numbers any way you look at it, and they are well paying jobs.

What additional infrastructure is required to fully capitalize on the surge in production? What levels of investment are required?

A lot of everything is needed. Additional gathering systems, storage, terminals, rail facilities, stabilizers, truck unload facilities, and pipelines are needed to balance the market, and to open up access to new end markets. This equates to large levels of investment.

We are spending upwards of $50MM on our NiCon crude by rail facility to accommodate a mere 5% of DJ Niobrara production. One of the recent long haul pipelines from the DJ to Cushing is going to cost about $700MM, and that will move about 20% of the volumes.

What objectives are you looking to meet by attending the 4th Annual Bakken and Niobrara Crude Takeaway and Markets initiative?

I want to hear what other industry professionals are seeing in the market. I like to get updates from companies on their projects, especially given the recent price pressure. I also plan to meet and discuss market opportunities with the great network of people that will attend this event.

How important is it for the industry to attend this meeting in January, at a time when producers will be fast approaching 2015 targets?

In such a dynamic market, with so many changes in the upstream, midstream, and downstream industries, it is critical for anyone in industry to keep up on recent news, announcements, and events.

The Rockies continues to be one of North America’s most prolific energy development regions. The 4th Annual Bakken and Niobrara Crude Takeaway and Markets event pulls together some of today’s most important companies doing business in the Rockies today. The Bakken and Niobrara are two plays that have the entire industry excited.