Oil Outlook: Top of Cycle or New Plateau?

Photo by Dan Larson

Publication: Greeley Tribune
Issue: Aug. 29, 2018
By Dan Larson

When Colorado’s oil and gas industry scraped bottom two years ago, companies were asked what they were doing to survive and to prepare for the recovery.

Even with prices at record lows, everyone agreed the downturn would not last and recovery was inevitable.

Companies surveyed at the time were hunkered down but optimistic. They cut capital expenses, reduced staffs and bullied oilfield service companies into bare-bones contracts.

When prices finally showed signs of recovery this past year, most exploration and production companies signaled their return not by announcing expansive new drilling programs.

Instead, operators have stair-stepped their increases and forecast modest capex budgets compared to 10 years ago, according to industry analysts.

Operators in the DJ Basin are recognized for their efficiency. Lately, they also enjoy an advantage over those in the Permian, said one industry analyst.
“Right now, the infrastructure bottlenecks are around the Gulf and from the Permian,” the analyst said. “All that new production there has filled the pipelines to capacity, and no new projects scheduled until next spring.”
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