|A prominent Colorado energy company announced it is increasing its oil and gas operations in the Denver-Julesburg Basin, announcing on June 10th it will go forth with its plans to drill more oil and gas wells as deep as 9,500 feet.
The Denver Business Journal reports that Bill Barrett Corp. intends on adding a second drilling rig for its operations in the Denver-Julesburg Basin and hopes to add 11 new gas and oil wells this year. By the end of 2015, the company plans on drilling 35 to 40 wells in total.
Although the new wells are ambitious, they will take a long time before they can produce significant oil and gas. The company claims the operation crews will need time to make them suitable for production, a task that will likely extend beyond Bill Barrett Corp.’s 2015 production timeline.
Some energy experts are surprised by the announcement, considering that several gas and oil companies in the United States have announced cuts in production and capital spending due to the slipping of oil prices over the past year. Regardless, Bill Barrett Corp. predicts its new operations will increase its oil production in the Denver-Julesburg Basin by 60% in 2015 and by another 25% the following year.
The company stated that its capital expenditures for 2015 will be between $320 and $350 million. The funding will come from the company’s cash flow, cash on hand, borrowing against its credit facility, and sale of its assets and stock.
The company has already filed a prospectus with the Securities and Exchange Commission (SEC) announcing that it could sell up to $100 million of its stock through an “at the market” offering.
Although the new move may rejuvenate the local economy, some people are worried that the influx of oil and gas production may put the area in danger. The region and many others in Colorado suffered from severe oil and produced water spills during the floods of September 2013. Approximately 48,250 gallons of oil and 43,478 gallons of produced water were spilled as a result of the floods.