Denver-Julesburg basin is an area that includes the oil-rich underground rock formation called Niobrara and production is now estimated to a third larger than in previous forecasts. Two of the biggest energy companies Noble Energy and Anadarko Petroleum Corp. are now predicting a combined oil output of 3.6B barrels.
Niobrara is one of several shale areas that have raised American crude oil production to new record levels partly because of the combination of hydraulic fracturing and horizontal drilling techniques. Noble Energy is estimating the Niobrara shale will produce approximately $10 billion a year in revenue and has plans to drill more than 300 wells in 2013 which is a 50% increase compared to 2012. Part of Noble Energy investment strategy includes a new natural gas processing plant expected to be completed by end of 2013 and a water management program that will be recycle 100% water through recycling or non-hydrologic (deep underground) sources.

Several expansion projects have already been announced and more are expected;

• August 2012, Houston based Plains All American Pipeline LP said it would build a railroad loading facility about 50 miles northeast of Denver in Weld County. The facility will be able to handle 68,000 barrels per day. The project is expected to be completed by 3Q 2013.

• October 2012, White Cliffs Pipeline LLC said it had enough commitments to ship crude oil along the pipeline to more than double its capacity to 150,000 barrels per day, up from 70,000. The pipeline runs 527 miles from Platteville to the oil storage yards in Cushing, Okla.

• The Front Range Pipeline, a proposed pipeline project by Anadarko, Denver’s natural gas processing company DCP Midstream LLC and pipeline operator Enterprise Products Partners LP. The proposed pipeline would start in Weld County and run 420 miles to Skellytown, Texas, connecting to another new pipeline. The pipeline will carry Colorado’s natural gas liquids (NGLs) such as propane and ethane to Gulf Coast refineries. If there is enough commitment, the pipeline could be in service by the end of 2013.

Colorado’s multibillion dollar oil and gas industry is continuing to have a positive effect on other economic sectors, including commercial real estate, and office leasing in the downtown area. Currently, there are approximately a total of 26 million square feet in the central business district (CBD) Denver office market and 30% of that is occupied by oil and gas companies.