Raymond James Energy Stat of the Week
by J. Marshall Adkins
Energy Stat: Will Lower Oil Prices Push the DJ-Niobrara from Tomorrow's Shale Play into Next Week?
December 22, 2014
The collapse in oil prices over the past several months has caused most energy investors to dust off their trusted basin-by-basin wellhead economics chart in order to better gauge the relative winners and losers. While no liquids play will be immune from the overall reduction in drilling activity, few are questioning the resiliency of the Permian and Eagle Ford economics relative to several more marginal Mid-Continent plays. But as it becomes evident that U.S. drilling activity may have to take it on the chin much harder in order to correct the supply problem, we are forced to take a deeper look into some of the lower profile plays, such as the DJ-Niobrara. Where should investors line up the DJ-Niobrara play within the oilpatch pecking order? In today's Stat, we will take a closer look at the DJ-Niobrara formation, both from a geological and wellhead economics perspective, in addition to discussing the potential ramifications of lower oil prices on DJ basin production growth and consequently on the midstream space.
This is a summary of a much more detailed commentary. Please contact your financial advisor for the full report.
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