Shared from the 10/8/2019 The Denver Post eEdition

AIRSWIFT

Oil, gas “buzz” brought job recruiter to Denver

A global job-placement and recruitment company specializing in the energy and manufacturing industries has opened an office in Denver on the strength of the oil and gas activity in northern Colorado.

Airswift, which has 70 offices in more than 50 countries, opened an office in downtown Denver about six weeks ago, drawn by “the buzz” about the Denver-Julesburg Basin, said Paul Carr, the company’s regional manager in the Rockies.

“Our industry is all about spotting trends, about spotting where the next big project is going to be,” Carr said. “There was a lot of buzz about how the D-J Basin could be the next Permian, so we started working with a few clients up here and saw a big gap in the market.”

Colorado oil production is expected to continue setting annual records for at least the next half-dozen years, according to BTU Analytics. Production is forecast to jump about 39% from 2018 to 2024, when the consulting firm expects nearly 250 million barrels of oil to be extracted.

The country’s most productive oil play is the Permian Basin in West Texas and southeastern New Mexico. It is credited with helping make the U.S. the world’s largest producer of crude oil.

While the Denver-Julesburg basin is one of the country’s major basins, the size of the Permian Basin’s resource is unparalleled, said Bernadette Johnson, vice president of strategic analytics with Enverus, which provides data and intelligence to energy companies.

The Permian Basin is about 250 miles wide and 300 miles long.

However, the Permian and the D-J Basin are similar in one respect: the number of rigs drilling new wells has declined.

“Nationwide, it’s gone from almost 1,000 rigs to 850ish,” Carr said.

There were 855 drilling rigs operating nationwide as of Friday, according to EnerCom Inc., an oil and gas consulting firm. The Permian had 415 rigs and the D-J Basin had 21, one fewer than the previous week.

“Just from speaking to reservoir engineers, directors of operations, those kind of people here, it seems like the boom in the D-J basin may be a couple years off, if it happens at all,” Carr said.

According to those in the industry, the nature of the reservoir is part of the reason, Carr added. “They’e unconventional plays, so they’re very difficult to drill.”

Another factor is lower oil prices, Johnson said.

“The recent peak was about 1,200 rigs for the whole country and that was in November 2018,” Johnson said. “The price was hovering around $70 WTI (West Texas intermediate), then dropped to the $50s.”

The price was nearly $53 per barrel Monday.

“That’s what’s really causing rigs to lay down. The D-J is affected like every other play in the country,” Johnson said.

However, there is an uptick in the building of midstream infrastructure, Carr and Johnson said. That refers to the infrastructure used for processing, storing and transporting oil and gas.

“In the Permian, we had a lot of success working with all the major midstream companies out there and that’s something we’re focused on here,” said Carr, who previously worked in Airswift’s hub in Houston. “That’s where we see our busiest area in the next year or two.”

Processing plants are being expanded in northern Colorado and more pipeline capacity will be needed, Johnson said.

“The U.S. is still growing production and the D-J in particular is still growing in oil production in spite of lower prices and fewer rigs,” Johnson said. “We’re not growing as fast as we were a year ago, but we’re still growing production, and any time you’re growing production, you need more infrastructure to handle it.”

Scott Prestidge with the Colorado Oil and Gas Association, a trade group, said a state law requiring new oil and gas rules to protect public health, safety and the environment will boost the need for more infrastructure such as pipelines to reduce truck emissions.

Carr and Johnson said investors have said uncertainty about the new regulations is dampening spending. However, the state continues to issue new drilling permits and thousands more are awaiting approval.

Judith Kohler: jkohler@denverpost.com or

@JudithKohler

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