NOVI Labs reports that the Denver-Julesburg, or DJ Basin, has been rebounding due to decreasing costs via faster drilling and higher production per foot. This analysis comes from highlights from a report only available to subscribers, but it gives some important numbers.
“The DJ's share of L48 horizontal oil has receded from a
peak of more than 7% in 2018 to ~4.5% today; however, per-foot productivity has
rebounded to all-time highs, and a 60%+ jump in drilling speeds since the 2023
lows has structurally shifted the cost curve down, making the basin competitive
again L48-wide.”
Major well operators like
Chevron and Occidental, and major independents like EOG, are involved in the
Colorado play.
“We estimate there are ~108 MM remaining lateral feet
(~11k two-mile locations) in the base case or ~18 years of inventory agnostic
of asset quality, with that figure rising to ~159 MM feet (~16k locations) with
the higher-uncertainty emerging zones included. On stricter risking (an in-zone
PDP neighbor within three miles plus a positive NPV25 at mid-cycle and strip),
remaining inventory falls to ~89 MM feet, or ~14.8 years at the 2025 drilling
cadence. The average NPV25 breakeven across the remaining inventory is ~$58/bbl
(assuming $3.50 HH and ~$30/bbl NGLs, pre-differential).”
“At the current cadence within the tier-1 rock alone,
that tranche of inventory (~27 MM feet) will exhaust in the late 2030's. This
update highlights Chevron, Occidental, SM Energy, Bison IV, EOG, and among the
smaller operators, Peoria Resources and PEDEVCO.”
References:
DJ
Basin Report Q3 2026. Brandon Myers. NOVI Labs. Email Summary.
Denver
Basin. Wikipedia. Denver
Basin - Wikipedia
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