Colorado oil regulators endorse new drilling restriction

PDC Energy

29/09/2020 20:02

By Liz Hampton
    DENVER, Sept 29 (Reuters) - Colorado's oil and gas regulator
this week gave preliminary approval for a rule to require a
2,000-foot (610 meters) separation between new oil and gas wells
and public spaces, compared to as little as 500 feet currently.
    A final vote on the rule, which would go into effect next
year, will take place in November. 
    Colorado is the fifth largest U.S. oil producing state, but
its population growth has led to increased friction between the
energy industry and environmental groups. Activists have tried
to pass setback requirements that would make it more difficult
to develop new wells, so far unsuccessfully.
    The new regulation would fit legislation passed last year
that altered how the oil and gas industry is regulated in
Colorado. It provides some leeway to meeting the spacing rule.
    Still, wider setbacks could hurt Colorado drillers,
according to energy consultancy Enverus, adding pain to an
industry reeling from Covid-19 pandemic lockdowns. 
    PDC Energy  PDCE.O  could see 89% of its total acreage off
limits for new well pads as a result of the rule, while 73%
could become non-viable for Extraction Oil & Gas  XOGAQ.PK  and
71% for Occidental Petroleum Corp.  OXY.N , analysts wrote in a
note on Monday.

 (Reporting by Liz Hampton; Editing by David Gregorio)
 ((Liz.Hampton@thomsonreuters.com; +1 713 210 8522; Reuters
Messaging: Reuters Messaging: liz.hampton.reuters@reuters.net))