The center of Colorado's shale oil drilling is the Denver-Julesburg Basin. The top-tier assets are concentrated in the Wattenberg Field, just north of Denver in Weld County, which produced 85 percent of the state's crude oil in 2014, according to the Leeds School of Business at the University of Colorado Boulder.
Drillers in the D-J Basin can break even with oil prices at about $40 to $42 a barrel, according to Ponderosa Advisors, a Denver-based energy advisory firm. While that's competitive with top-tier acreage in other oil-producing regions, it ranks at the bottom of the list, said Ponderosa CEO Porter Bennett.
Drillers in the Permian Basin are looking at break-evens in the low $30s. In Oklahoma's emerging Scoop and Stack plays, break-evens for prime assets are in the mid-$30s. North Dakota's Bakken boasts break-evens in the high $30s.
"Relative to other parts of the country, I'm not sure that it's attractive enough to warrant people to come here that haven't already established a base," said Bennett.
Much of the dealmaking in the D-J Basin in past years has been among companies established in Colorado that aim to consolidate their existing positions, said Velie, the Capital One Securities analyst. These transactions help oil firms assemble larger blocks of land, allowing them to drill longer horizontal wells and streamline oil shipments, he explained.