Oil prices are up due to the decrease of inventories in the U. S. The dispute between the U.S. and China oil trade is the prime basis for predicting the direction of oil.

In CNBC article titled “Oil rises 0.1% to $56.30 as US inventories decline,” it explains the two economies are waiting to move forward with high-level trade until October, which in return has boosted the prices.

Brent crude oil increased 16 cents and West Texas Intermediate (WTI) increased 4 cents. Brent crude oil is $60.86 a barrel and WTI is $56.30 a barrel.

It is anticipated that natural gas production will continue to grow throughout the end of the year in 2019. The average price for Brent crude oil is averaged at $64/b according to EIA with West Texas Intermediate (WTI) crude oil priced $5.50 less than Brent. Natural gas prices are expected to increase to $2.75/MMBtu throughout 2019 and into 2020.

For more information email us at: info@swanenergyinc.com

The successful production of domestic oil and gas means our country is safer, our economy is stronger, and we keep more Americans working.

As a result, the federal government offers very attractive oil and gas tax incentives for investments in domestic oil and gas development. There are three primary incentives:

Intangible Drilling Costs

Participation in a Swan Energy joint venture partnership allows partners to deduct most of their investment though Intangible Drilling Costs (IDC) in the same tax year and can be offset against active or ordinary income. Partners receive one dollar of tax deduction for every dollar of IDC invested. IDCs can make up roughly 85% of the total investment. For example, an investment of $100,000 made in a Swan Energy joint venture partnership could yield up to $85,000 in tax deductions for the year the investment is made. The IDC deduction, a non-preference item, reduces the investor’s Adjusted Gross Income and lowers their Alternative Minimum Tax.

Tangible Drilling Costs

Tangible Drilling Costs take into consideration the expenses and hard cost needed to drill wells such as wellheads, pipes and storage tanks. These costs account for approximately 20% of the total investment and may be depreciated over 5 to 7 years.

Percentage Depletion Deductions

The Percentage Depletion Allowance, also known as “Small Producers Exemption.” This incentive allows for 15% to 25% of the gross income from an oil and gas producing property to be tax free. By way of example, if partners are getting a monthly revenue check of $10,000 then $1,500 to $2,000 is tax free.

Hypothetical Example

without tax deductions

Swan Energy partners with tax deduction

For more information email us at: info@swanenergyinc.com

Swan Energy continued its excellent track record in the first half of 2018. Existing wells are producing, new wells are in the works, and exploration continues.

Swan Resources:

Swan Resources has interest in 55 Oklahoma oil wells. These wells have together generated 1,750,953 (gross) BOE to date with a steady daily production rate of 500 (gross) BOEPD. We continue to pursue new developments. 3 new wells in Love County completed in 2017 are now producing. We are completing a 4th well in September. Our technical team is also hard at work scouring the 3D seismic for our next drilling locations.

Swan Exploration:

The 17 new wells we participated in 2017 are already generating revenue and outperforming other wells we have had in the Wattenberg field. Only 2 of our 144 Colorado wells did not produce. The 142 producing wells have yielded a cumulative production to date of 25,396,999 (gross) BOE at a daily rate of 15,611 (gross) BOEPD. Swan Exploration has 3 wells awaiting completion and several new wells to participate in to be drilled soon with permits in had or applied for we could see more than 40 new wells to participate in.

Oak Energy:

Located in Matagorda county, Texas Oak Energy has 5 active producing wells that produce 60 BOEPD, double the amount produced in the first quarter of 2018. We hope to continue to increase our BOEPD with a series of workovers for 25 shut in wells. The first three are scheduled to begin in September 2018.

Swan Mining:

Expectations are high for our 55-acre gold mine in Baker County, Oregon. Our projections lead us to believe the mine will yield the most gold in company history and give us a lot of hope as to continuing operations through 2019 and beyond.

A Joint Venture (JV) is when two or more parties come together and participate in a specific project. In a JV, all parties are invested in the project in terms of money, time, and effort to build upon and accomplish a specific task. While Joint Ventures are generally small to medium size projects, major corporations also use this method in order to diversify.

A Joint Venture can ensure the success of smaller projects for those that are just starting in the business world and can also benefit established corporations. Since the cost of starting a new project is generally high, a Joint Venture allows all parties to share the burden of the project, as well as the resulting profits.

A Swan Energy JV is a partnership between individual qualified “partners” who invest in specific oil and gas drilling projects. A JV will include approximately 30 to 40 qualified partners who have the ability to exercise decision-making control over key project decisions. The existing Partners in any given Swan Energy JV are responsible for approving incoming partners until the project is funded.

Joint Venture Partners must represent that they have knowledge and experience in financial and business matters and are capable of evaluating the merits and risks of participating in a Joint Venture. Swan Energy’s Partners have very diverse backgrounds and experiences which provides more strength to the partnerships. Partners include small business owners, professionals, doctors, farmers, entrepreneurs, ranchers, lawyers, accountants and executives from large corporations.

Update from the field

Colorado update

Swan Energy’s Colorado projects saw a very active Q4.  We spudded 27 wells as part of four pads in Wattenberg.  Specifically, those wells include the Pratt pad where 6 wells were spud in addition to the Greenleaf pad (11 wells); Crow Creek pad (7 wells); and, Colt pad (3 wells).  For the year, Swan participated in 47 wells in Colorado, of which 22 are producing an average of 344 BOEPD and another 25 wells are under completion.

There is no sign of slowing down in Wattenberg as Swan seeks to continue to grow production, reserves and revenue.  We have received wellbore notifications for 10+ wells in the play.  Also, in 2015 we will operate our first pad on the Swank lease.  This is significant because we will be in charge of the workflow and the distribution of revenue.  This will provide our partners greater access to field information from drilling through production, as well as a faster turnaround of revenue from the purchaser to the partner. The company will also participate in up to 100 non-op wells in Colorado.

Oklahoma update

In Q4, Swan drilled the Laflore 1-10 in McClain County located one mile north of the Oliver 1-15 well.  This well came on flowing from the second Bromide formation at over 400 BOEPD.  In 2014, Swan Energy participated in 13 new wells, of which 10 are producing an average of 72 BOEPD. An additional three wells are under completion.

The Sasquatch 1-34 in McClain County is currently being completed.  This well offsets the Javaman 1-35 well.

Looking forward, we anticipate that Swan Energy and its JVs will participate in 6 to 10 new wells. Perhaps the most exciting news for Oklahoma is that we will participate in the drilling of our first horizontal well, the Mr. Ed, located in the Woodford play.

Name: Brandon Davis

Business: Swan Energy

Employees: 60

Location: Greenwood Village, Colorado

Twelve years ago, Brandon Davis was unemployed. While job hunting, he stumbled across an ad for a sales position at an oil company. Davis applied and landed the position, but it proved to be more than just a job—it was a stepping-stone for his entrepreneurial spirit. In 2008, he started Swan Energy Inc., an independent oil and gas producer. Here, Davis talks about the problems with Colorado and where his company is headed.

What advice would you give small business owners new to the game?

Have one business and one focus, or your business will never succeed. Over the years, I have tried to start other businesses on a large scale and small scale, and it’s failed because I wasn’t there day-to-day. I couldn’t be, in my case, three places at once.

[Second,] find something that you enjoy, that you love, that you’re passionate about, so that you’re excited to go to work every day for something besides money, because money will only take you so far.

Lastly, once you’ve started your business, and it starts working, never stop what makes it work. A lot of people start having success and think they need to change because they have more money, more people. They change the dynamic of the company in an attempt to be what they think they should be instead of just being them, which was what made the company start in the first place.

What are your thoughts on the way Colorado treats its small businesses?

I don’t think Colorado appreciates its small businesses. I think it did 20 years ago. I think in the transformation of this state, it’s a lot less appreciative of what it was and caters to large corporations.

There are a lot of little regulations that are expensive. You can’t have a business these days without either a human resources department or a human resources company that you work with because if you fire someone or someone quits, a) you are susceptible to being sued because of the regulations and b) you have hours and hours of paperwork to fill out for unemployment to justify why that person quit.

How has your affiliation with NFIB helped you deal with the issues small businesses continue to face?

It’s a huge help, and it’s comforting to know that someone’s out there fighting for small businesses in the trenches of the state and federal levels.

What are some challenges you’ve faced as a business owner, and how have you handled them?

The biggest challenge we’ve faced in our industry is regulation. There’s the federal regulation from an oil and gas standpoint, and all of the negative press out there. We combat it with facts.

Another issue is the state [regulations]. The state isn’t on the same page as to the forum in which we raise our money. On a federal level, it’s very clear, and what we do is we raise joint-venture funds. Some states like to change that, and that’s something we’ve fought lawsuit and after lawsuit—and we’ve never lost one. We’ve won every one of them.

The way we’ve combated that to this point is with legal teams and money. We’re starting to work more on the lobbying side.

Where do you see your company headed in the near future?

It’s really hard to see what the next step is. We’re not a small business. We’re not a big company, on the stock trade or worth billions of dollars. We’re kind of in the middle right now.

We’re either going down to a small company, which I don’t want, or, more than likely, we’re going to continue to strategize and continue to focus on success and growth and transform ourselves into a company that is in the billion-dollar range as far as value.

“We are saddened by the loss of our friend and the namesake of Swan Energy, Carl Swan, who passed away on Friday, May 22 at the age of 89.  Carl touched so many people during his long life and helped too many of us to count. He was both a mentor and a friend, and I will never forget what he taught me about being successful in this business and in life. As a tribute to Carl, I named Swan Energy in his honor.  His legacy lives on.”

Swan Energy has participated in 40 new wells, with 12 of them in Oklahoma and 28 in Colorado. So far this year 1,312,962 BOE have been produced from our 103 wells, generating over $111,000,000 in gross revenue. Swan and its partnerships are currently participating in 7,500 BOEPD or approximately $637,500 per day.

In the third quarter, Swan Energy has participated in 15 new wells: 7 in Oklahoma and 8 in Colorado. Wells currently drilling and in completion for the quarter include: Coho, Crush, Double J, Marathon, Oliver, Bullfrog, and Swimmin’ Hole. We have more planned in Q4.

Colorado Update

There are big things coming in 2015, including operating our own wells in Colorado. Swan Energy will operate its first Pad on the Swank acreage located just southeast of Hudson, Colorado. Swan Energy’s affiliates will control the workflow and will plan the drilling, completion, fracture treatments and every other aspect of getting the wells in production. This will provide our partners with greatly increased access to data and will expedite the revenue process. Our goal is for the process to be closer to the Oklahoma assets which deliver revenue like clockwork, 60–90 days from first production. Operating its own wells in the Wattenberg field is a big step for Swan Energy and its partners; it will help take everyone to the next level.

Oklahoma Update

In Oklahoma, however, we believe that having Charter Oak Production operating our wells is as or more efficient than Swan operating its own wells. Charter Oak operates over 90 wells in McClain and the surrounding counties. After working with Charter Oak for the past six years there have been no issues and we continue to have a high degree of confidence in their ability to effectively operate wells.

Another “Wattenberg type” field in Oklahoma? Here’s the big scoop for our partners! We will be participating in the Mr. Ed well with Charter Oak Production Co. This will be the second horizontal Woodford well Charter Oak has drilled in McClain County. If successful, it could establish a major drilling boom in an area where we have nearly 15,000 gross acres.

Brandon Davis has been honored by the Denver Business Journal as one of the city’s “40 Under 40” which recognizes 40 business professionals under the age of 40 years old for their business success and community contributions. Brandon was one of 375 people nominated for the honor.

The Denver Business Journal (DBJ) recognized Brandon’s active involvement in several community and charitable causes that focus primarily on the health and benefit of children. He has actively supported The Denver Children’s Home, the Colorado Christian Cup, and the Denver Active 20/30 Children’s Foundation. He was also lauded for his remarkable efforts in raising awareness for the families of the Sandy Hook Elementary School shooting and for his support of the Special Care Foundation.

Brandon’s exceptional business success was taken into account as well. Brandon recalls arriving in Denver from Oklahoma virtually penniless in 2003. He was in debt over his head, his car had been repossessed, and he slept on his cousin’s couch surviving on 99-cent Taco Bell burritos. Brandon then responded to a newspaper ad that promised: “99% failure, 1% success. Six figure income potential.” This was the opportunity for him. The job was a sales position at an energy exploration company. He joined a 17 person sales force and within three months was the top salesman. Then, reminiscent of a scene from “Glengarry Glen Ross,” 16 people were fired. Brandon was the only one to survive. Soon he was training and managing his own sales team and was promoted to vice president. He was 25 at that time.

Today, Swan Energy is a leading independent oil and gas company specializing in the exploration and production of domestic oil and natural gas fields through joint venture partnerships. The company currently manages nearly 50 partnership projects in Colorado and Oklahoma.

Brandon’s vision is to lead the industry with the highest quality projects and the most transparent operations. He is taking the lead in developing transparency in an industry that historically operates in the shadows. The true measure of his leadership is hearing from those partners who invest in the company’s joint ventures. Several times a year he invites the partners, and meets with them in person, to visit their oil and gas wells. The response is overwhelming – those in the partnerships are like family and many see Brandon as a brother even though most of the partners are 20 plus years his senior.

Brandon and his fellow 40 Under 40 honorees will be recognized at a lunch on Monday, March 16 from 11:30 to 1:30pm at the DCPA Seawall Ballroom in Denver.

Republished from Greeley Tribune

In 2013, Colorado broke a 56-year old record for crude oil production. Data collected by the Colorado Oil and Gas Conservation Commission showed a record-breaking 64.9 million barrels were produced in Colorado in 2013. The previous record was set in 1956, when Colorado produced 61.9 million barrels.

Monthly production figures for 2014 appear to be running ahead of 2013’s figures. However, COGCC won’t have final, verified 2014 crude oil production figures for several months. Will 2014 be another record-breaking year for Colorado? Although it is still too early to tell, looking at the factors behind the production records set in 1956 and 2013 record may give clues as to what the future holds for Colorado crude oil production.

Behind the numbers

The story of Colorado’s record-breaking oil production is about more than just total annual barrels produced. The “where,” “why” and “how” behind the numbers tell the interesting part of the story.

COGCC has been tracking statistics related to oil and gas production in Colorado since the commission was established in the early 1950s. Thom Kerr worked for COGCC for 23 years. Now retired from COGCC, he works as an independent consultant for the industry, but he still knows his way around the data. He used annual oil production data to put together a graph that neatly tells the story of the 1956 and 2013 production records.

“The big story in 1956 was in the Denver-Julesburg basin,” said Kerr. “They were finding channel sands in the D and J sand formations in the Denver basin. A lot of fields were discovered in Morgan, Logan and Washington counties, and some of those fields were amazing.”

Indeed, in 1956, Washington County produced 6.8 million barrels; Logan County produced almost 8 million barrels; and Morgan County produced 12 million barrels. Those three counties accounted for about 43 percent of Colorado’s total oil production in 1956.

But the county that made the single biggest contribution to Colorado’s production record in 1956 was Rio Blanco County. Rio Blanco County is located in western Colorado, near the Utah border. The giant Rangely Oil Field is located in the county. The Rangely Field is one of the oldest and largest oil fields in the Rocky Mountain region. Rio Blanco County’s contribution to Colorado’s 1956 production record was 30.2 million barrels, which was equal to almost 49 percent of Colorado’s total production that year.

By way of comparison, Weld County contributed a paltry 1.5 million barrels to Colorado’s total production in 1956. According to COGCC data, it wasn’t until much later, in 2000, that Weld County bested Rio Blanco County with respect to percentage of Colorado’s total oil production. In 1999, Rio Blanco was still ahead, producing 6.65 million barrels, which represented 33.78 percent of Colorado’s total annual production; that same year, Weld County was right behind Rio Blanco County, producing 6.48 million barrels, which represented 32.89 percent of Colorado’s total production.

In 2000, Weld County finally bested Rio Blanco County. Weld County produced 7.08 million barrels (35.37 percent of Colorado’s total). Rio Blanco County produced 6.52 million barrels (32.56 percent). Over the last 14 years, Weld County has continued to significantly outproduce Rio Blanco County. In 2013, the last year for which final figures are available, Weld County produced 52.6 million barrels (81 percent of Colorado’s total production) to Rio Blanco’s 2.9 million barrels (6.1 percent of Colorado’s total production).

What made Rio Blanco County the largest contributor to Colorado’s oil production in 1956? And why did Weld County usurp that role in 2000?

The answer to those questions lies largely in the attributes of three variables that significantly impact oil production. Those three variables are the location and nature of the resource; the market for that resource; and the technology used to access the resource.

Location, location, location

The real estate agents’ mantra, “location, location, location,” can apply equally well to oil production. But beyond simple location, oil production is specifically about geological structure.

Bob Weimer began working full-time in the oil and gas industry in 1949, after earning a bachelor’s and a master’s degree in geology from the University of Wyoming. He earned his doctorate in geology from Stanford in 1953, and served as a professor of geology at the Colorado School of Mines for many years.

“As a petroleum geologist, Colorado is an interesting area to study,” Weimer said. “It is an unusual area because you can observe a lot of the rocks that contain oil along the flanks of the mountains. You can use direct observations of the different rock formations and map the structure.

“Rangely has a large dome-type uplift called an anticline,” explained Weimer. “That was a known structure, identified in the early mapping done by geologists. There were also some seeps of gas, and maybe some oil as well, along the White River, which gave the petroleum geologists reason to believe there would be oil and gas accumulation at depth.”

An anticline is like an upside-down bowl, under the earth’s surface. Impermeable rock in the dome structure traps an accumulation of oil and gas. The anticline structure at Rangely created a conventional target for the industry: oil in a known structure, accessible by vertical wells and conventional pumping equipment.

Rangely Field’s conventional anticline structure contrasts significantly with the Wattenberg Field’s low-permeability (tight) formation.

“It’s a different horizon,” explained Steve Sonnenberg, professor and Charles Boettcher Distinguished Chair in Petroleum Geology at the Colorado School of Mines. “The current drilling activity in the Wattenberg is largely chasing the Niobrara and the Codell sandstone. Those two reservoirs have much lower reservoir quality. Porosity – the pore spaces in the rock – and permeability – the connected porosity that enables fluids to flow through the rock – are much lower in the Wattenberg and the Niobrara and the Codell sandstone than it ever was in Rangely.

“Rangely was a pretty high quality reservoir to begin with,” said Sonnenberg. “The Niobrara and the Codell sandstone are located in the bottom of the sedimentary basin, fairly deep. They require hydraulic fracture stimulation because without it, quite honestly, they would be uneconomic wells.”

Show me the money

Another factor that clearly impacts production in any given year is the price of oil.

“In general, production is related to the number of wells being drilled,” said Sonnenberg, “and when the price of oil drops, it impacts whether somebody is going to drill wells or not. If the price of oil goes down, depending on what a particular company’s economics are, they may decide not to drill any more wells. It is one of those things that is always operator-specific.”

Lack of a market contributed to the Rangely Oil Field’s slow start. Shallow wells were drilled into the Mancos Shale formation in Rangely in the very early 1900s; it wasn’t until the early 1930s that Chevron drilled deeper and hit a vast reservoir of oil in the Weber (pronounced WEE-burr) Sandstone.

“There was not a lot of market for the oil they found in 1902, and for the oil they produced in the 1920s and ‘30s,” Weimer said. “The oil price you would get in the marketplace from the refinery was less than one dollar per barrel at that time.”

Only after WWII ended in 1945 did the price of oil begin a consistently upward trend, jumping to $2.60 per barrel by 1948. Production rose accordingly. “By the end of ’45, 182 wells had been drilled at Rangely,” Weimer said, “and in ’46, there were 54 rigs operating in Rangely.”

According to U.S. Energy Information Administration data, oil was priced at $2.79 per barrel in 1956, Colorado’s record-breaking production year.

“Still, if they drilled a well in 1956, they would have to find the money to drill,” said Weimer. “And then get a contract and leases and so on. And it would cost them $3 a foot, if it were a dry hole. If it is a dry hole, you just pull out of the hole and plug it. And so if it were a 5,000 foot dry hole, it would cost you $15,000.

“But if you found the sand that had oil in it, mainly oil or gas and oil, you would still have to spend money to complete the well — you would have to run more casing to total depth; seal off the near surface water bearing sands; put tubing down the hole, inside the casing; and then install the pumping equipment and so on,” said Weimer. “It was a big decision to make, whether or not if you drilled the well you could produce it at an economic rate. That was a critical factor, because you had to invest so much money.”

For people interested in a personal look at the history of that time, Weimer recommends the book, “A Look Back: The D-J Play, 1950–1965” which was published in 1998 by R.E. Chancellor and A. A. McGregor. “It is an interesting collection of personal reminiscences,” Weimer said. “They do a good job of describing what these people went through, what the risks were that they took, what it meant to be successful, and what it meant to go broke.”

The market played a significant role in Colorado’s 2013 production record as well. EIA data indicates the price of oil in 2013 was $95.99 per barrel, which, at that time, was the highest price per barrel ever recorded.

This past year has been an extremely volatile year for oil prices, with the West Texas Intermediate crude oil benchmark exceeding $100 per barrel in July, and then dropping to below $70 per barrel in December 2014. The price drop came so late in the year, it may not have a significant impact on Colorado’s final 2014 production numbers, but could make a difference in 2015.

The role of technology

The third factor critical to oil production records is the technology used to access the oil.

When the first deep well — the Raven A-I — was drilled in the Rangely Field, it took nearly two years to break through the Weber sandstone.

“The thick, thousand foot Weber sandstone reservoir was a very difficult reservoir to drill with the tools available at that time,” said Weimer. “They developed a new innovation of drilling the wells through this interval to depths of 5,000 to 6,000 feet, by drilling and coring with diamond bits. The diamond, being a very hard substance, was able to drill that economically. Whereas the other type rotary bits were not very effective.”

In addition to the bits, other oilfield technologies, such as pumping equipment, evolved as well.

Ken Bailey, an amateur photographer who attended high school in Rangely during the late 1960s and early 1970s, watched with fascination as the oil field technology in Rangely evolved over time. In his photographs, he documented the evolution of the pumping equipment as it changed from conventional pumping equipment, like the Lufkin 64 used at the Raven A-I Discovery site, to replacement equipment designed for secondary (water flooding) and tertiary (carbon dioxide flooding) recovery phases in the field.

“Back when Rangely still had hundreds of these walking beam pumpers, the great majority of them were running on internal combustion engines, so they made a chugging or a rumbling sound,” Bailey remembered. “The town was at one end of the field, and at night when the air was clear, the hundreds of pumps in the field made a kind of distant rumbling sound that actually was rather soothing.”

“The Rangely Field today is vastly different from the era of my photographs,” Bailey said. “Today most of the wells are pumped by electric pumps underground and there is no sound at all. A person driving through Rangely Field today would be lucky to see any pumps. There is not much on the surface but tanks and buildings.”

Just as the development of diamond bits and more efficient pumps has enabled the Rangely Field to be produced more effectively, the development of horizontal drilling and hydraulic fracturing has enabled the Wattenberg Field to be produced more efficiently and economically.

“The technology always advances through time,” said Sonnenberg. “There were deep wells drilled in the 1950s, but when we got into the ‘60s, ‘70s and ‘80s, the drilling technology dramatically improved and enabled wells to be much deeper. The bits improved, the rigs improved, everything improved through time.”

“Technology plays a huge role in production,” Sonnenberg said. “In fact, the latest uptick in production is all related to technological changes. And the largest part of that is horizontal drilling and multi-stage hydraulic fracturing.”

The outlook going forward

The Rangely field has been steadily producing oil for nearly 70 years, when primary production, secondary production and tertiary production are taken into account.

Thom Kerr notes that between 1952, when the COGCC started keeping statistics, and the first part of 2014, the Rangely Oil Field has produced a cumulative total of 783.6 million barrels of oil.

The Wattenberg, which started producing oil in 1970, has produced a cumulative total of 296.1 million barrels of oil. That is equivalent to 38 percent of Rangely’s total production. Considering the fact that Rangely had at least a 20-year headstart, “Wattenberg’s production is phenomenal,” said Kerr.

Is it possible that the Wattenberg Field will see the same long life that the Rangely Field has had?

According to Kerr, that answer is yet to be determined.

“Rangely and Wattenberg are completely different plays,” Kerr said. “All reservoirs function on porosity and permeability. In the conventional reservoir, like Rangely, you have much greater porosity and permeability. So in the initial phase of production, you may recover 20-25 percent of the oil in place. And then you start secondary recovery, typically water floods. And then you go to the next phase, tertiary recovery, which is an even more enhanced process, using CO2 or heat or some other methodology.

“What you are trying to do is to get your recovery factor up. Ultimately, the recovery in Rangely, of the total oil in place, may be 50 percent, or 60 percent if they are really lucky,” Kerr said. “But the Wattenberg is not a conventional reservoir, so the porosity and permeability are not in place there for a well to produce on traditional methods, such as reservoir pressure and pumping. It requires additional technology. It requires artificial stimulation, which is hydraulic fracturing.”

And as for the potential total recovery from an unconventional reservoir, Kerr said, “that is what they are still trying to figure out and learn.”

There is plenty of news about the price of oil these days and much of it is good for our Joint Ventures in Colorado and Oklahoma. Just consider these very positive points from the U.S. Energy Information Agency:

• Niobrara production is forecast at 403 barrels a day per rig in November, a 2% increase over October.
• Production of crude oil from seven key shale plays is forecast to grow to a record 5 million barrels a day in November – a 118,186-barrel-a-day increase from October.
• Oklahoma is set to surpass Alaska as the country’s fourth-largest oil producer early next year.
• Chart A from the EIA domonstrates the increases for oil and gas.

Citi recently published a report titled, “Energy 2020: Out of America – The rapid rise of the United States as a Global Energy Superpower” in which it concluded.

“When it comes to crude oil and other hydrocarbons, the US is bursting at the seams. This situation is unlikely to stop even if the prevailing prices for oil fall significantly.”

“We are very proud to have the Swan Energy name so closely associated with the Colorado Avalanche for what promises to be a very exciting season,” said Swan Energy CEO Brandon Davis.  “This partnership signals the growth and maturity of Swan Energy as a significant Denver based company that is here to stay for the long term.”

In 2013-14, the Avalanche posted the third-best record in the NHL.  The team returns to the ice for the 2014-15 season having won several individual honors in 2013-14.  Nathan MacKinnon (Calder Memorial Trophy), Ryan O’Reilly (Lady Byng Memorial Trophy) and Coach Patrick Roy (Jack Adams Award) were all award recipients.

The puck drops for the regular season on Thursday, October 9 when the Avalanche faceoff on the road against the Minnesota Wild.  The home opener is Saturday, October 11 against the Wild and can be seen on live at Pepsi Center or on Altitude TV.

About Swan Energy

Swan Energy is a leading independent oil and gas company specializing in the exploration and production of domestic oil and natural gas fields through joint venture partnerships.  The company currently manages over 40 partnership projects. Swan Energy’s goal is to lead the industry with the highest quality projects, most transparent operations, and quickest ROI for its partners.

Source: U.S. Energy Information Administration, DrillingInfo, Inc., Illinois State Geological Survey, Indiana Geological Survey

Crude oil and lease condensate production in the United States exceeded 8.6 million barrels per day (bbl/d) in August, a production volume not observed since July 1986, according to EIA’s latest Petroleum Supply Monthly.

More than half of total U.S. production was accounted for by record production from three basins in three states. Production from the Permian Basin in Texas and New Mexico accounted for 1.66 million bbl/d, while the Eagle Ford Shale in the Western Gulf Basin, also located in Texas, produced 1.57 million bbl/d. The Bakken Shale in North Dakota’s Williston Basin accounted for 1.13 million bbl/d.

Domestic production has increased dramatically over the past four years, increasing from 5.4 million bbl/d in January 2010 to its current level, driven by increasing production from shale and other tight formations. During 2014 alone, 10 states (the three states previously mentioned in addition to Oklahoma, Colorado, Wyoming, Utah, Ohio, West Virginia, and Pennsylvania) have set monthly production records since 1995, and accounted for more than 64% of total U.S. production during August.

Source: U.S. Energy Information Administration, Petroleum Supply Monthly

Although down from 2,031 rigs in 2008, U.S. oil and natural gas rig counts have been increasing over the past two years. A total of 1,904 rigs were actively drilling during August, 1,578 of which were targeting liquids. Notably, once production starts, three-fifths of all the wells produce both oil and natural gas. Of the 1,904 active rigs, 62 rigs were operating offshore while the remaining 1,842 rigs were drilling onshore.

Now typical of the industry, horizontal rigs represent the most common rig type with 1,330 active drilling operations in August, while 374 vertical and 210 directional drilling rigs were operational, respectively. Higher rig counts, along with improvements in drilling productivity, are expected to increase U.S. liquids production to nearly 9.7 million bbl/d by December 2015.

U.S. oil production has been increasing monthly at an average of 62,000 bbl/d since 2010. EIA forecasts that previous production highs set in the 1970s will be surpassed before the end of 2015. This is especially notable as Alaska production provided up to 2 million bbl/d of total U.S. production volumes during high production years in the 1980s. Decreases in Alaska production are related to natural reservoir decline and reduced exploration along the North Slope; however, discoveries in southern portions of Alaska’s Cook Inlet are adding new production capacity.

Production gains have been observed across the Lower 48, with particular increases in crude oil and lease condensate production from shale and tight formations. Production estimates from EIA’s Drilling Productivity Report confirm that many top-producing reservoirs include production involving horizontally drilled wells, hydraulic fracturing reservoir stimulation, and multi-well pad drilling. The highest-ranked tight producing reservoirs in 2014 include Texas’s Eagle Ford and Wolfcamp formations, North Dakota’s Bakken-Three Forks formations, New Mexico’s top Spraberry and Bone Springs formations, Oklahoma’s Woodford Shale formations, Colorado’s Niobrara formation, Utah’s Green River formations, Ohio’s Utica and Point Pleasant formations, and the Marcellus Shale formations in West Virginia and Pennsylvania.

Principal contributor: Evan Frye

Source: http://www.eia.gov/todayinenergy/detail.cfm?id=18831