UPDATE 2-Colorado flooding disrupts oil, gas production

Mon Sep 16, 2013 6:08pm EDT

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By Eileen Houlihan

NEW YORK, Sept 16 (Reuters) - A week of torrential rain in Colorado that left seven people confirmed dead has also disrupted oil and natural gas production and transportation in the state, several companies said on Monday.

El Paso Pipeline Partners' Colorado Interstate Gas (CIG) unit declared force majeure on a natural gas lateral pipeline due to the floods.

CIG said in a website posting that the flooding had exposed some facilities on the line leading to its Young Storage site.

Another line leading to the Tritown delivery point had also become exposed. The lines were taken out of service for safety precautions while inspections are conducted, the posting said.

CIG operates a 4,300-mile pipeline system that transports natural gas from production areas in the Rocky Mountains and the Anadarko Basin on the Colorado-Kansas border to customers in Colorado and Wyoming and to other Midwest, Southwest and western states.

Separately Anadarko Petroleum Corp said it shut 600 wells in the Wattenberg field north and east of Denver due to the floods.

The Wattenberg field is part of the Niobrara shale formation in the Denver-Julesburg (DJ) Basin.

"Restarting the activities is expected to be significantly delayed due to road and location conditions," Anadarko said in a statement published on its website.

Canadian energy producer Encana Corp shut 397 out of 1,241 gas wells in the same basin as a result of the flooding, a company spokesman said.

"That began last Thursday when we started to have heavy rains and there is no estimate on when these wells will be brought back into production," Encana spokesman Doug Hock said.

PDC Energy Inc said it had suspended production from a limited number of its Wattenberg Fields wells.

Synergy Resources said an initial assessment of its facilities revealed a small number of existing vertical wells would be offline for an indeterminate period.

On Monday Tisha Schuller, president and CEO of Colorado Oil & Gas Association, testified before the state's Oil and Gas Conservation Commission regarding the industry's operational response to the floods.

In a statement, Schuller said the group had reached out to all member operators and the majority had little to no impact to their well sites. Those that were affected were actively monitoring and working with the Conservation Commission and emergency responders.

The DJ basin was the most significantly affected portion of the state. "All impacted wells have been shut-in, which means the well has been closed off or shut and is not producing any oil and gas product of any kind."

Schuller added that while the rains had subsided in many areas of the state, some of the most heavily affected areas were still under a flash flood warning until the end of the day.

Colorado has just over 51,000 active oil and gas producing wells drilling in the state, according to the Conservation Commission website.

The state produced 160,000 barrels-per-day of oil in the first six months of this year, according to data from the Energy Information Administration.

EIA data also showed the state produced 1.64 trillion cubic feet in 2011, the latest data available.

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