Press Release: Mineral Owners Appreciation Breakfast for Weld County and Surrounding Areas, CO

The National Association of Royalty Owners (NARO), Colorado Chapter, and Extraction Oil & Gas have united to co-sponsor an event for mineral owners and families in Weld County and the surrounding areas. Representatives of Extraction and NARO will speak about the issues facing oil and gas development in Weld County and the important role that mineral owners play in combating the regulatory constraints facing the industry.

The event will be held next Thursday, January 28th from 8 a.m. – 10 a.m. at the Union Colony Civic Center’s Hensel Phelps Theater located at 701 10th Ave in Greeley. Breakfast will be provided for attendees, beginning at 8 a.m. in the first floor lobby. For those who are in town for the Colorado Farm Show, please stop by before the day’s events on Thursday. The Civic Center is located only 1.5 miles from Island Grove Regional Park.

Oil’s Next ‘Scary Price Point’ May Close The Spigot

Oil prices are nearing the point where pumping crude out of the ground ceases to be economical across the U.S., meaning the flow of oil — and cash for production companies — could dry up.

On Friday, U.S. crude futures settled down 5.7% at $29.42 a barrel, and Brent fell 6.3% to $28.94. With prices already below $30, no U.S. shale oil company is making money from operations, said Jason Wangler, a managing director at Wunderlich Securities.

The next “scary price point” is $20 a barrel, he said. That’s when the production of oil itself — just the cost of lifting it to the surface, excluding overhead, interest and one-time drilling expenses — is no longer feasible.

And $20 a barrel is a possibility. Analysts at Citigroup (NYSE:C) and Goldman Sachs (NYSE:GS) have said oil could fall as low as $20 a barrel this year. That would be the “absolute bottom for oil prices in the short term,” and in some places $30 a barrel is the bottom in terms of the marginal cost of production, said James Williams, an energy economist at WTRG Energy.

Next goal: Reclaim unused well pads

When falling prices caused natural gas development to start dropping off in places like western Colorado after peaking in 2008, in some cases it ended up in companies doing little or no drilling on well pads they’d already built.

How to ensure such pads are reclaimed through reseeding and other measures is part of a stepped-up focus by the Colorado Oil and Gas Conservation Commission. It comes as COGCC Commissioner Richard Alward, a Grand Junction ecologist and consultant whose work includes oil and gas reclamation, continues to call for an update of the agency’s reclamation rules.

A new report by commission staff finds that of some 98,000 wells under the agency’s jurisdiction, about 45,000 are eligible for final reclamation, and 58 percent of those have passed final reclamation inspection. That leaves 18,685 locations that the agency plans to focus on inspecting, including about 12,000 sites with wells that either were dry from the start, or produced before being plugged. The nearly 6,800 remaining sites are what the commission calls abandoned locations — sites where companies planned to drill wells but never drilled them.

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Phill Foster and Company, Denver, Colorado

www.phillfosterco.com