Denver Basin

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The Denver Basin is an oil and gas producing basin located primarily in Northeastern Colorado.

History of the Denver Basin

The Denver Basin, also known as the Julesburg Basin, Denver-Julesburg Basin, or the D-J Basin, is a structural basin that developed through a series of orogenic and epeirogenic tectonic adjustments. This basin's history, from the Cambrian to Recent, demonstrates a virtually complete cycle of tectonic movement. The basin covers Eastern Wyoming, Northern Colorado, and small parts of Western Kansas and Nebraska, and it envelopes over 70,000 square miles of the region.

Production History

Production in the Denver Basin dates back to 1881 when an oil discovery was made in the Florence Field in Omaha, Nebraska. Production didn't stop there, as wells began to sprout up shortly after in 1901 in the Boulder Field in Boulder, Colorado. As of 2007, more than 52,000 wells had been drilled among more than 1,500 oil and gas fields throughout the basin. The primary producing field in the Denver Basin, the Wattenberg gas field, was established in 1970 when the first well was drilled.

Geologic Risk

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There are several geologic risks, as well as economic risks, in regards to oil and gas plays in the Denver Basin.

Risk of Exploration Wells

There ares several oil and gas companies that are facing the reality of some of these geologic risks regarding the Denver Basin. Several companies have drilled "exploration wells" along the outskirts and edges of the basin, in hopes of finding some sort of production. However, these exploration wells are different than one might think when they hear the term "exploration." Typically, "exploration" refers to the analysis of whether or not there are petroleum source rocks that have migrated to reservoir rocks and are being held by traps or seals. However, in this case of "exploration wells," companies are drilling conventional exploration wells to see whether they were right and in many cases, they were wrong. In fact, only around 1/3 of exploration wells lead to commercial discoveries, the rest have been "dry holes." [1]

Minimal Play Production Risk

Another risk associated with the Denver Basin is that there have only been a couple of promising plays within the basin that have shown to be economically productive. The Niobrara and Codell plays are the only plays that have proven to be economically productive. Although there have been several findings of other possible productive spots of oil and gas, there is a potential risk in drilling in those areas due to the fact that it may not be economically beneficial to produce at current oil and gas prices. [1]

Petroleum Elements

The Denver Basin is made up of both conventional and unconventional plays across parts of Colorado, Wyoming, South Dakota, and Nebraska. The oil produced in this providence consists of different types of sandstones and shales from marine deposits. They are trapped by mostly stratigraphic mechanisms and sealed by up dip marine shales.

Conventional Plays

There are six main conventional plays that make up this basin. Most of these are made up of thin stretches of marine deposited sandstones and Cretaceous shales. Some plays produce oil and gas from shale source rocks like the Pierre Shale Sandstones Play, and some produce dry gas from organic-rich chalks like the Niobrara Chalk-Shallow Biogenic Gas Play. Conventional plays allow for hydrocarbon migration which allows for some to have a combination of factors like the Dakota Group Play. This play is made up of different sandstones trapped by stratigraphic and combination mechanisms. The seal is made up of marine mudstones and cemented sandstones.

Nonconventional Plays

Nonconventional plays produce hydrocarbons that do not migrate. The Denver Basin contains five nonconventional plays that produce both oil and gas. They produce hydrocarbons in low permeability tight source rocks. Much of the oil is produced from organic-rich fractured cyclic chalks and calcareous shale like the Niobrara Fractured Limestone Plays. These plays largely depend on thermal maturity and degree of fracturing to produce the oil.

Future Potential

Geologic Potential

The Denver Basin is a well established basin that has had producing wells since 1901. Much of the production of oil and gas comes from the Cretaceous sandstones in several different formations. Due to the length of production from this basin, the future is very predictible based on current technology. In the future more gaseous plays including the Codell and Niobrara which may become the largest producing formations but are currently limited due to economics.

The above figure shows the potential of the field from moderate to high potential.

Political Climate

The political climate of Colorado makes oil and gas development significantly more difficult. Proposition 112 was a spacing order that would extend the distance between a well head and any occupied structure to 2500 feet. This would have effectively closed off nearly 99% of all future development. There have been several propositions to limit oil and gas production in the state of Colorado, but thus far none of them have passed. The primary areas that are affected by the oil and gas industry are Boulder and Weld counties, but they could not be more different from a micropolitical stantpoint. Boulder county has nearly zero new wells being drilled while Weld county produces most in the state. Industry experts predict aproximately ten to twelve more years of new development before the state seriously cracks down on the industry.

Engineering

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References

-Aguilar, J. (2018, November 7). Prop 112 fails as voters say no to larger setbacks for oil and gas. Retrieved from https://www.denverpost.com/2018/11/06/colorado-proposition-112-results/

-Fishman, N. S. (2005). Energy Resource Studies, Northern Front Range, Colorado, 1–170. Retrieved from http://www.usgs.gov

-Higley, D. K., Pollastro, R. M., & Clayton, J. L. (n.d.). Denver Basin Province (039), 1–19. Retrieved from https://certmapper.cr.usgs.gov/data/noga95/prov39/text/prov39.pdf

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  1. 1.0 1.1 Msands. “MRP 28: DJ Basin Overview.” The Mineral Rights Podcast, 21 June 2019, mineralrightspodcast.com/mrp-28-dj-basin-overview/.

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