The Niobrara Beast

http://www.wpxenergy.com/ ^ | 10/10/2013

[ckilmer]

WPX ENERGY MAKES DISCOVERY IN NIOBRARA FORMATION

Results Build Upon Previous Mancos Success

TULSA, Okla. – WPX Energy’s (NYSE:WPX) successful Niobrara shale discovery in western Colorado has the potential to significantly increase the company’s natural gas reserves and daily production in ensuing years.

The discovery well produced an initial high of 16 million cubic feet per day at a flowing pressure of 7,300 pounds per square inch.

The well has since been choked back substantially to optimize reservoir performance and ensure maximum resource recovery. Over the past 30 days, it produced at an average rate of 12 million cubic feet per day.

WPX has the lease rights to approximately 180,000 net acres of the Niobrara/Mancos shale play that underlies the company’s expansive leasehold position in the Piceance Basin.

Substantial gathering and processing infrastructure is in place to accommodate additional gas volumes from the area, as is take-away capacity from the basin. Gas produced from the Niobrara and Mancos shales can be processed without modification to existing gas treatment facilities.

WPX has drilled more than 4,000 wells in the Piceance Basin, mostly in the tight sandstones of the Williams Fork formation.

“We have a large-scale position in the Piceance, where we are the lowest-cost, most efficient producer in the basin. We know the Piceance is a world-class asset. Now the results of our Niobrara well are showing that our acreage has even greater reserves potential,” said Ralph A. Hill, president and chief executive officer.

“This exploratory work in the Niobrara and Mancos shales of the Piceance was a logical follow-on to our previous Mancos shale discoveries in the San Juan Basin.

“In the latter half of 2010, we drilled two horizontal discovery wells there that produced at high rates from the same reservoir that we’re delineating in the Piceance. The San Juan results already added 1.3 trillion cubic feet of proved, probable and possible reserves to WPX,” Hill added.

“Based on the early indications from this Piceance discovery, we’re talking about the potential to ultimately more than double our current 18 trillion cubic feet equivalent of 3P reserves,” Hill said.

The Niobrara and Mancos shales are generally located at depths of 10,000 to 13,000 feet. The Williams Fork is a shallower formation, generally located at depths of 6,000 to 9,000 feet. In the Piceance Basin, WPX holds an average working interest of 66 percent in the Niobrara and Mancos shales.

WPX plans to drill at least two more horizontal Niobrara wells in the Piceance Basin this year, pending permits, starting within a six-mile radius of the first well. This additional work will help WPX evaluate how productive the formation is across the basin. Other operators also are delineating the extent of the resource on the eastern and western margins of the basin.

WPX’s first Niobrara horizontal well is located on the company’s existing Piceance Valley acreage in Garfield County. It was drilled to a total vertical depth of 10,200 feet with a 4,600-foot horizontal lateral.

Drilling operations commenced in August 2012 during which the company successfully recovered 535 feet of continuous core. Completion operations, including 17 frac stages, were completed in December.

WPX previously drilled a vertical Niobrara test well in late 2011 that yielded the impetus for drilling the first horizontal well to gain additional data about the productivity of the formation.

Steven G. Natali, senior vice president of exploration for WPX, commented, “As we study what our geoscience and operations teams have achieved in the Niobrara and Mancos shales, we’re seeing hydrocarbon saturation across tremendous thickness in a highly over-pressurized environment. These shales are located directly underneath our current Williams Fork production in the Piceance.

“Advances in horizontal drilling and the way that our completions engineers apply multi-stage fracture technology means that much of this gas can eventually be brought to the surface at an economic rate,” Natali added.

http://www.wpxenergy.com/news-media/press-releases/2013/122_wpx-energy-makes-discovery-in-niobrara-formation.aspx

[ckilmer]

From your link
Noble Energy calls niobara top tier oil play.
http://www.ogj.com/articles/print/vol-110/issue-12b/general-interest/noble-energy-calls-niobrara-top-tier-oil-play.html

Noble energy along with WPX Energy—makes two companies now who are calling the niobara a major play.

[PA Engineer]

Drilling operations commenced in August 2012 during which the company successfully recovered 535 feet of continuous core. Completion operations, including 17 frac stages, were completed in December.

I suspect that WPX will also be employing Octopus drilling operations. A lot of throttling back on these wells to get them to transmission pressures.

Excellent news if we can find a cure for LIV Zombieism.

[thackney]

I am not trying to downplay the potential. You asked me to compare it to other more established producing fields and I don’t have the info to do so.

[ckilmer]

here’s another company that calls niobara a big play

Noble Energy calls niobara top tier oil play.
http://www.ogj.com/articles/print/vol-110/issue-12b/general-interest/noble-energy-calls-niobrara-top-tier-oil-play.html

[ckilmer]

yes I understand.

I don’t have any broad info either on how to compare niobrara apple to apples with other natural gas formations .

in the niobrara the WPX article says

“Drilling operations commenced in August 2012 during which the company successfully recovered 535 feet of continuous core.”

If this translates to mean that they found natural gas 535 deep then you could compare that to natural gas deposits elsewhere.

[thackney]

If this translates to mean that they found natural gas 535 deep

It does not. They are talking about thickness of bearing formation, not depth.

[ckilmer]

Looks like a formation in Okalahoma called scoop also has oil 500 feet deep.

http://www.reuters.com/article/2013/10/18/shale-usa-idUSL6N0I819G20131018

[PA Engineer]

Thanks for the link. These caught my eye:

we’re seeing hydrocarbon saturation across tremendous thickness in a highly over-pressurized environment

and:

Noble is emphasizing liquids development, and its DJ basin holdings are driving the company's anticipated production growth

[ckilmer]

It does not. They are talking about thickness of bearing formation, not depth.
\..........
yeah that’s what I meant. I just didn’t say it well. the question is does “thickness of bearing formation” mean the same thing as when they say that oil is in formations that are 100 feet thick or 200 feet thick or 500 feet thick.

If so then the Niobrara formation at least in some sectors has oil bearing formations that are roughly 500 feet thick.

this compares favorably with the baaken where the thickness of the formation is in the 100 foot range and the eagle ford where the thickness of the formation is in the 200 foot range.

[thackney]

“thickness of bearing formation” mean the same thing as when they say that oil is in formations that are 100 feet thick or 200 feet thick or 500 feet thick.

I believe that is true.

If so then the Niobrara formation at least in some sectors has oil bearing formations that are roughly 500 feet thick.

this compares favorably with the baaken where the thickness of the formation is in the 100 foot range and the eagle ford where the thickness of the formation is in the 200 foot range.

The Bakken and the Eagle Ford have a variety of thickness, just as I suspect the Niobrara. The Bakken has multiple layers as well along with the underlying Three Forks.

Current oil production activity has focused on the middle member as well as the underlying Three Forks Formation. The thickest area of the Bakken Formation is southeast of Tioga, North Dakota, T. 155N., R. 94W., Section 15, where it reaches 145–150 feet. This area is located at the eastern base of the Nesson Anticline. The formation generally thins evenly toward the margins of the Williston Basin. The middle and lower members of the Bakken share a similar isopachous trend (maximum thickness 75 and 55 feet, respectively); however, the upper shale demonstrates distributed areas of maximum thickness near the eastern and southern marginal shelf in North Dakota, in addition to maximum thickness near Tioga.

The overlying Lodgepole Formation consists of dense limestone and calcareous shale with minor amounts of chert and anhydrite with a maximum thickness of 900 feet in eastern McKenzie, ND. The Bakken is underlain by the Three Forks Formation, which has a maximum thickness of 250 feet in eastern McKenzie County. The Three Forks Formation consists of shales, dolostones, siltstones, sandstones, and minor occurrences of anhydrite.

http://www.undeerc.org/bakken/geology.aspx

- - - - - - - - - -

- - - - - - - - - -

This paper gives a higher level of detail for Niobrara and associated geology. Note the pockets, varying thickness and other items.

I'm not trying to say this isn't much. But I don't see the information showing expectations to be significantly greater the Eagle Ford. When a press release uses "oil in place" numbers and makes no reference to technically producible, I see it as marketing, not technical publication.