The SunCoast

The legacy WPX leaves behind in the Piceance Basin

The legacy WPX leaves behind in the Piceance Basin

For those in the energy industry, it didn’t necessarily come as a surprise when rumors began to circulate that WPX Energy would be selling off its assets in Colorado’s Piceance Basin, but it certainly did feel strange. With over 200,000 acres of Piceance leases and more than 4,700 wells, WPX Energy was the largest natural gas producer in the basin. WPX was the name when it came to the Piceance.

But we’re all going to have to get used to a new name in the Piceance game, as the sale went through and Terra Energy picked up WPX Energy’s natural gas fields in the Piceance for a cool 910 million. WPX Energy, for their part, will be shifting their focus away from natural gas and towards oil, specifically in the Permian Basin. Last July they did a little spending themselves, buying up 92,000 net acres in the Permian – with 22,000 boepd – from RKI Exploration & Production. WPX figures this gives them 3600 potential drilling locations.

Creating industry history

hydraulic fracturingAs much as the energy industry is all about the future and we’re all constantly looking forward, once in a while it’s fun to look back. In this case, we can look back on the developments in the industry WPX Energy was responsible for thanks to their involvement with the Piceance Basin.

The wealth of oil and gas in the Piceance Basin has been long known, and in 1969 the US government actually detonated an atomic device in a well in the Piceance in an attempt to liberate the natural gas in the basin. While the atomic device did free up large amounts of natural gas, however the gas was thoroughly contaminated by radioactivity and therefore unusable. The Department of Energy’s cleanup began in the 1970’s and was formally completed in 1998.

When WPX Energy – then called Barrett Resources – began operations in the Piceance Basin, they took a decidedly different and non-radioactive approach. In order to liberate natural gas from the underground sandstone formations, WPX Energy pioneered the use of fracking. This was a watershed moment in the energy industry. Since then, over two million oil and gas wells in the US have been hydraulically fractured. Upwards of 95% of all new wells are hydraulically fractured.

What’s next for WPX

Like the rest of the industry, we’re interested to monitor what WPX Energy gets up to in the Permian Basin. During the oil slump valuations for Permian-focused companies have held up better than those in any other US oil play.