Why Bill Barrett Corporation Favors the Denver-Julesberg Basin



Bill Barrett’s DJ Basin operations

Bill Barrett Corporation’s (BBG) position in the Denver-Julesburg (or DJ) Basin is primarily in the eastern plains of Colorado and in parts of southeastern Wyoming.

BBG’s annual 10-K report defined the basin as a “high growth oil development” area, with several operators focusing on the Niobrara and Cordell formations.

In 2015, BBG drilled 43 operated wells and completed 39 operated wells. The company had one rig operating at the end of 2015. BBG’s annual 2015 report noted that its 2016 drilling activity will be lower in 2016 than in 2015 due to lower commodity prices (USO) (UNG).

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Key advantage of the DJ Basin

The DJ Basin boasts one of the lowest break-even costs, as you can see in the above graph. The Permian and STACK (Sooner Trend Anadarko Canadian Kingfisher) plays boast even lower break-even costs. The DJ Basin also beats SCOOP (South Central Oklahoma Oil Province), Eagle Ford, and Bakken.

Read The Permian Basin: The Oil and Gas Industry’s Darling to know more about the Permian Basin. Key Permian players include Concho Resources (CXO), Apache (APA), and Pioneer Natural Resources (PXD).

Scot Woodall, BBG’s CEO (chief executive officer), spoke about the DJ Basin in the company’s 3Q16 earnings conference call. He said, “Having a strong held by production asset base, coupled with having no drilling or pipeline commitments, has enabled us to be disciplined in our capital deployment during 2016 resulting in no increase in long-term debt and being cash flow positive for the year.”

In the next part of this series, we’ll take a look at BBG’s operating margins in the DJ Basin.


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