While the Eagle Ford and Bakken are getting all the attention from energy investors these days, they aren’t alone in providing muscle to our nation’s oil production. There are plenty of other shale formations waiting to take the crown.
One of the best lies within the land of craft beers and legalized marijuana.
Colorado’s Niobrara has the potential to be one of the most prolific shale plays in the country. And like Eagle Ford and Bakken, it mean plenty of profits for the firms tapping its bounty — not to mention cheap feedstocks for the refineries on the West Coast.
For investors in energy stocks, the profit potential could be equally as huge. Betting on the undiscovered Niobrara and the energy stocks tapping its bounty could be one of the best bets in the oil & gas sector today.
Undeveloped & Bigger Than the Bakken
Like many of the shale formations dotting our countryside, hydraulic fracking is giving the Niobrara new life. Various energy stocks have been making plenty of profits from exacting oil and natural gas from the field for roughly 100 years now. However, it wasn’t until recently that the field has begun to really shine — thanks to the advanced drilling revolution. By fracking the Niobrara, producers have been able to unlock a plethora of oil, condensate and other natural gas liquids.
Just how much? Current reserve projections place the Niobrara ahead of the much-touted Bakken shale. That could mean huge upside for the energy stocks that have the most exposure.
Estimations by the Oil & Gas Journal put the amount of total amount of oil in Niobrara at a staggering 500 billion barrels — with about 7 billion currently recoverable using today’s technology. Both of those amounts dwarf the Bakken formation. What’s more, drilling costs for the field are about $2.5 million less per well, and the Niobrara has a higher recovery percentage per well.
Another bonus — the gravity of the field’s oil is deliciously sweet and matches what’s being produced in the Bakken and Alaska’s North Slope. That means it’s a refiners dream come true as it isn’t as hard to crack and turn into finished petroleum products. It’s also cheaper per barrel. Current prices for Niobrara crude clock in at around $85 per barrel. Alaskan crude is nearly $107.
And the recent slide in Alaskan and Californian crude oil production has the West Coast refineries looking for more feedstocks for their facilities. With the Niobrara just around the corner, the field could be the next be supplier to these end-users.
Add in the midstream infrastructure that’s already in place, and the field is starting to look like a major contender for shale king crown. But which energy stocks will be wearing that crown?