The Permian Basin is the foundation of Occidental Petroleum’s operations, but the Rockies provide it with diversification and growth runway.
Jason Sevin, general manager for Oxy’s Rockies region, oversees the company’s operations in Colorado and Wyoming.
Sevin grew up in an oilfield family and has spent his entire career with Oxy, holding engineering, operations and leadership roles in South Texas and the Permian before moving to Denver for his present role two years ago.
Now he manages a portfolio that includes 750,000 net acres spread across the Denver-Julesburg (D-J) and Powder River basins, which were picked up in Oxy’s acquisition of Anadarko Petroleum in 2019.
Oxy produced approximately 95,000 bbl/d of oil, 718 MMcf/d of gas and 77,000 bbl/d of NGL from the Rockies in the first quarter.
Upside in the Powder
The D-J drives cash flow, but Wyoming’s Powder River Basin holds important upside for Oxy.
The company has scaled production from the oily Powder River since taking control of the Anadarko assets. Oxy produced an average 20,000 bbl/d (gross) of oil and 50 MMcf/d of gas from the Powder last year, per Wyoming state data.
But compared to the D-J, the Powder is in nascent stages of development.
Horizontal drilling in the Powder requires immense amounts of power and water—resources in short supply in the basin’s core.
The Powder is much drier than the D-J, Sevin said, and agriculture competes with energy for the few available surface water sources.
Powder wells are also much oilier and produce less water than D-J wells. Oxy’s Powder wells produced average six-month cumulative oil volumes of around 110,000 bbl in 2024.
“It’s the opposite problem that we have in the Permian Basin, where we can produce a lot of water,” Sevin told Oil and Gas Investor. “In the Powder, it’s a lack of enough source water for completions.”
Oxy has been able to leverage relationships with surface owners to secure enough water for its next several years of development in Wyoming. The company is also investing in water storage and recycling infrastructure to lower development costs.
“Now it’s a matter of linking all that [infrastructure] up to be able to deploy it where we need to,” Sevin said.
Terrific Turner
Oxy is applying lessons learned from the Permian and D-J to the Powder’s oily stacked pay.
“We’ve got 150,000 acres of blank slate,” Sevin said. “Now, we get to draw up our development plan with a decade-and-a-half of [shale] learning to be able to apply from the get-go.”
Powder River operators are landing horizontal wells in 12 different benches, according to an analysis by Energy Advisors Group. Like the basin’s other top producers, Oxy is actively landing laterals in the Niobrara Shale.
Powder’s Niobrara is deeper but oilier than the D-J. Niobrara is generally encountered at vertical depths of around 9,000 ft to 11,000 ft across the Powder.
Oxy has consolidated its efforts on 150,000 net contiguous acres in the southern portion of the Powder, which it views as the highest quality rock in the entire basin.
The company has access to several stacked zones in Converse County, Wyoming, including the semi-conventional Turner and Parkman benches.
“We decided to consolidate the south because you’ve got a pretty good stacking of high-quality semi-conventional sandstones,” Sevin said.
The sandstones are typically shallower and require softer fracs than the deeper, tighter shale rock formations.
They’re also key to Oxy’s operations in the Powder. The company prioritizes drilling the high-yielding sandstone wells first to recover development costs, followed by infill drilling of shale wells.
According to Wyoming state data, Oxy completed four wells landed in Turner last year. Two wells permitted to drill the Turner field landed in the overlying Sage Breaks bench, data show.
Production from the Turner wells is matching or even surpassing the performance of some of the top wells in the Permian Basin, where leading operators average around 200,000 bbl of oil per well over their first 12 months, according to Novi Labs data.
Over an average runtime of 340 days, four Turner horizontals yielded approximately 1 MMbbl of oil—performance independently validated by Novi.
“The Turners are exceptional,” Sevin said. “You can pay out your initial investment of facilities and a lot of that infrastructure upfront off the Turner.”
- Queens Park Fed #3570-15-T2H IP’d at nearly 2,000 bbl/d of oil and 2.5 MMcf/d of gas. The 10,000-ft lateral was landed in Turner at a vertical depth of 11,285 ft.
- Nitro Fed #3569-19-T1H (10,000-ft lateral) IP’d at 1,158 bbl/d and 2 MMcf/d after coming online on April 26, 2024. The well reached a vertical depth of 11,219 ft.
Oil IPs for the four Turner wells averaged 1,252 bbl/d, or 1,573 boe/d including gas.
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Future horizons
Oxy’s Powder asset also has upside exposure to the Parkman, Teapot and Mowry Shale zones.
The company’s Powder development plan has revolved around Niobrara and Turner wells for several years. But Oxy is planning some spacing tests in other benches toward the end of this year and into 2026.
Certain areas of Oxy’s Powder asset could support increased development in the Parkman and Teapot zones over time, Sevin said.
Oxy is also “pretty excited” about opportunities in the deeper Mowry Shale, he said. According to a recent U.S. Geological Survey assessment, the Mowry system still holds an estimated technically recoverable 473 MMbbl of oil and 27 Tcf of gas across parts of Wyoming, Colorado and Utah.
“[Powder is] a pretty sizable growth wedge for our U.S. onshore business and something we’re really counting on in the next few years,” Sevin said.
Power in the D-J
Around 75% of the company’s Rockies investment is funneled into the D-J Basin, where Oxy is one of the top producers. Oxy has 600,000 net acres in the D-J Basin.
Oxy has a repeatable manufacturing operation underway in the D-J’s Niobrara Shale. The Niobrara is also the top target in the Powder River Basin to the north, but it lies deeper in the Powder compared to the shallower Niobrara Formation in the D-J.
“That impacts development costs a bit,” Sevin said.
Several factors support Oxy’s focus on the D-J. The basin possesses grid access and has little need for major new buildout. It’s close to Denver, with a mature supply chain and existing facilities nearby.
Takeaway options are plentiful, and Oxy can send its oil and gas in a couple different directions out of the basin.
D-J wells have higher gas-to-oil ratios, keeping wells flowing naturally longer. Less lift energy is needed, and plunger lifts are often enough, Sevin said.
Oxy also has a sizable minerals position in the D-J, further supporting the basin’s economics.
In March, Oxy closed a $905 million sale of D-J mineral and royalty interests to NGP-backed Elk Range Royalties.
Oxy has seen strong output in the basin. The company’s D-J wells produced average six-month cumulative volumes of 130,000 boe in 2024. Several of its top D-J horizontal wells have surpassed 200,000 boe in their first six months of production, according to investor materials.
“Those first 12-month [cumulative production] in the D-J—where we are today versus where we were two years ago has been a pretty big step change,” Sevin said.