Colorado drillers fuel record oil output in rush to finish wells

WASHINGTON (Bloomberg) -- Booming oil production in Colorado is fueling record output in the Niobrara basin that spans four states.

The number of drilled-but-uncompleted wells in the shale play plunged in June as producers -- spared of the same pipeline constraints that have dogged other parts of the nation--ramped up activity. The tally of so-called DUCs dropped by 42 from May, falling for the fifth straight month, according to the Energy Information Administration’s Drilling Productivity Report.

While the DUC count includes both oil and gas walls, the drop is a testament to rising oil production in Colorado, which is poised to overtake California, said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

Output in the Golden State has fallen gradually in recent years. Colorado, meanwhile, is pumping at record levels. Output reached 451,000 bpd in April, only slightly less than California. Niobrara production is expected to reach an all-time high of 611,000 bpd in August, the EIA said.

“You’re seeing really good growth in Colorado production,” said Lipow said. “That’s reflected in producers completing those uncompleted wells and being able to get that oil to the Cushing market,” he said, referring to the main storage hub.