Tag Archives: Niobrara

The Well Map Update (12-3-13)

Testing is finished with The Well Map and we’re going to go live next week. Here’s what you need to know:

*There’s roughly 13k wells on the map and we’ll be adding more each week.
*The 13k wells include areas such as the Bakken, Eagle Ford, Miss Lime, Powder River Basin, DJ Basin, Piceance Basin, Permian Basin, Granite Wash, Marcelllus and Utica.
*We’ll be updating existing data and adding new data all the time. Wells from the San Juan Basin, SCOOP and Marmaton are coming soon.
*For quick analysis of the data we’ve installed several filters including operator, well name, formation, wellbore, spud date, state/county and production ranges.
*Once data is filtered, the filter summary averages the data filtered which allows the user to pull data points such as average production by operator, formation or state quickly.
*The map will be free, all you have to do is sign-up.
*If you want to stay up to date on the new wells we add each week and crunch raw data, we’ll be offering several newsletters containing just that, these start at $50/month.
*To stay up to date on new features and launch information, like us on Facebook and follow us on Twitter.

Thanks for your support,

The Well Map Team

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Largest Oil and Gas Wells by Formation

Note: Added Powder River Basin well on June 10, 2013

I don’t usually talk about “largest wells” in formations or plays because they aren’t representative of the productivity or economics of a play as a whole. With that said, it’s still good to know where the biggest wells are being drilled because that usually indicates there’s a lot of oil in the area (whether it can be extracted consistently and economically is another matter).

Note: Peak month rate oil/gas is the amount produced in a given month divided by 30 days.

Well Name: Behr 11-34
Operator: Whiting (WLL)
County, State: Mountrail, ND
Formation: Bakken
Spud Date: April 15, 2008
Peak Month Rate Oil: 1,492 BOPD
Peak Month Rate Gas: 1,008 Mcfpd
Cumulative Oil: 911,627 BO
Cumulative Gas: 558,996 Mcf
Latest Monthly Rate Oil: 273 BOPD
Latest Monthly Rate Gas: 242 Mcfpd
Source: North Dakota Oil & Gas Commission/The Energy Harbinger.

Well Name: Jendrusch Unit 1H
Operator: Plains Exploration and Production (PXP)
County, State: Karnes, TX
Formation: Eagle Ford
Spud Date: April 21, 2012
Peak Month Rate Oil: 2,551 BOPD
Peak Month Rate Gas: 3,917 Mcfpd
Cumulative Oil: 341,352 BO
Cumulative Gas: 629,981 Mcf
Latest Monthly Rate Oil: 681 BOPD
Latest Monthly Rate Gas: 1,825 Mcfpd
Source: Texas Railroad Commission/The Energy Harbinger.

Well Name: Frye Ranch 2012H
Operator: Forest Oil (FST)
County, State: Wheeler, TX
Formation: Granite Wash/Hogshooter
Spud Date: March 23, 2010
Peak Month Rate Oil: 2,149 BOPD
Peak Month Rate Gas: 20,630 Mcfpd
Cumulative Oil: 327,782 BO
Cumulative Gas: 6,081,260 Mcf
Latest Monthly Rate Oil: 70 BOPD
Latest Monthly Rate Gas: 1,444 Mcfpd
Source: Texas Railroad Commission/The Energy Harbinger.

Well Name: Livestock 1-25H
Operator: SandRidge Energy (SD)
County, State: Grant, OK
Formation: Mississippian Lime
Spud Date: March 18, 2012
Peak Month Rate Oil: 1,595 BOPD
Peak Month Rate Gas: 3,909 Mcfpd*
Cumulative Oil: 170,398 BO
Cumulative Gas: NA
Latest Monthly Rate Oil: 214 BOPD
Latest Monthly Rate Gas: NA
Source: Oklahoma County Commission/The Energy Harbinger.
*Natural gas data is not publicly available for this well. Rate was computed using IP rates in the completion report.

Well Name: Dolph 27-1HZX
Operator: Anadarko Petroleum (APC)
County, State: Weld, CO
Formation: Niobrara
Spud Date: January 9, 2011
Peak Month Rate Oil: 730 BOPD
Peak Month Rate Gas: 1,595 Mcfpd
Cumulative Oil: 154,287 BO
Cumulative Gas: 568,554 Mcf
Latest Monthly Rate Oil: 71 BOPD
Latest Monthly Rate Gas: 331 Mcfpd
Source: Colorado Oil and Gas Commission/The Energy Harbinger.

Well Name: Anderson 18H-1
Operator: Encana (ECA)
County, State: Amite, MS
Formation: Tuscaloosa Marine Shale
Spud Date: January 15, 2012
Peak Month Rate Oil: 840 BOPD
Peak Month Rate Gas: 267 Mcfpd
Cumulative Oil: 115,991 BO
Cumulative Gas: 35,075 Mcf
Latest Monthly Rate Oil: 169 BOPD
Latest Monthly Rate Gas: 54 Mcfpd
Source: Mississippi Oil & Gas Board/The Energy Harbinger.

Well Name: Federal 16-10/3FH
Operator: Helis (Private)
County, State: Converse, WY
Formation: Frontier
Spud Date: July 16, 2011
Peak Month Rate Oil: 1,198 BOPD
Peak Month Rate Gas: 1,461 Mcfpd
Cumulative Oil: 270,530 BO
Cumulative Gas: 272,705 Mcf
Latest Monthly Rate Oil: 281 BOPD
Latest Monthly Rate Gas: 258 Mcfpd
Source: Wyoming Oil and Gas Conservation Commission/The Energy Harbinger.

For those of you who use the prototype version of the The Well Map, this is the type of data you’ll be able to access using the full version which will launch this summer.

Disclaimer: These are the largest wells in the above formation that I’m aware of. If you know of larger ones, feel free to disclose.

DJ Basin Update (CRZO gets $4,558 per acre in JV)

EOG Resources’ (EOG) Jake 2-01H well on its Hereford prospect (Northern Weld County) put the horizontal Niobrara on the map with an average 30-day production rate of 645 BOEPD.  This well gave the industry hope that the formation could be produced economically outside of the prolific Wattenberg field.  Up until recently, results in the DJ Basin (Niobrara) had been inconsistent, with several operators drilling a number of uneconomic wells.  Chesapeake Energy’s (CHK) CEO Aubrey McClendon has called CHK’s acreage in the area “disappointing” and has since put it up for sale.  EOG’s CEO Mark Papa said the following regarding the Niobrara, “I mean it’s no secret that the Niobrara is proven to be one of the more complex horizontal oil plays that both we and the industry have dealt with.”

Why is it so hard to drill in the Niobrara?

For starters, when people talk about the Niobrara they’re probably referring to the DJ Basin but know that the formation spans several states and several basins (see map below), including the Green River Basin (NW Colorado), North Park Basin (North-Central Colorado), DJ Basin (NE Colorado) and Powder River Basin (Eastern Wyoming).  While producing intervals will vary across these basins, I’m going to focus on the geology of the DJ because most of the Niobrara’s development has emanated from this basin to date.

Sources: Colorado School of Mines; Colorado Geological Survey

As you can see from the stratigraphic column above, the DJ Basin is characterized by three benches (A, B and C) which are primarily composed of chalk that have been compressed over time, thus having low permeability.  These benches are separated by three marl/shale zones that contain high clay volumes (virtually no permeability) making it very difficult/expensive to frack a well through all three zones as the clay blocks commingling.

Drilling into the benches separately is no easy task either as they are relatively thin.  The “B” bench is the thickest, ranging from 20’-40’, making it difficult for operators to stay in zone.  Complicating matters is faulting throughout the Basin which thins the intervals in certain areas.  Imagine fracking into a zone 7,000′ deep  that may be no wider than 10′.  The FT Hays Limestone, Codell Sand, D-Sand and J-Sand are also prospective for hydrocarbons throughout the DJ Basin, creating a series of stacked pay zones for operators to explore.

What the DJ Basin does have a lot of is oil and natural gas.  Nearly two billion barrels of oil equivalent (BBOE) has been produced from the Wattenberg field alone and sell-side investment bank Tudor, Pickering and Holt (no relation) estimate the basin holds an additional 4-10 billion barrels of recoverable oil and gas.  This isn’t just a Niobrara story either, as the D and J-Sands alone have produced approximately 1 BBOE to date.  The basin also gets oilier as you move North too, with 90% oil cuts in EOG’s Hereford prospect.  The big question is how to get to it economically.

(See TPH’s Niobrara Primer here, it’s a great resource which I relied on for this report)

One of the keys to producing from the Niobrara is to find areas where it’s naturally fractured, which increases the operators margin for error when drilling the chalk, but could also fracture the marls/shale, allowing for commingled production from the Niobrara benches.

The Wattenberg field has been economic for decades, in part because natural fracturing exists throughout the field.  What companies must do outside of the Wattenberg is either find areas with natural fracturing or induce fracturing themselves.  This is not only expensive (well costs are $1.0 to $2.0 million more outside of the Wattenberg), but well production outside of the field has been no more prolific and much less consistent, leaving operators like Chesapeake and GMX Resources (GMXR) to abandon the play.

So where are we at in the DJ Basin today?

EOG Resources

EOG has ramped-up production in the play since 2010, drilling more than 50 wells and producing more than 3.0 MMBbls of oil and 4.0 Bcf of natural gas.  The bulk of the company’s production has come from its Hereford ranch prospect, lying in Northern Weld County, where it holds approximately 80,000 net acres.  After evaluating its well results, EOG decided the DJ Basin would be an ancillary project for the company as its economics didn’t rival those of its other plays.  Consequentially, the company hasn’t done much in the basin since 2011 and has quit talking about it in its presentations.  Who could blame them really? EOG has the best acreage in the two best unconventional oil plays on the planet.

Just how economic were EOG’s wells in the DJ?  I took a look at ten different wells in its Hereford prospect and found an average 30-day IP rate of 348 BOEPD.  I then selected six wells from different quartiles of this sample size and looked at 80-90 day rates from these wells (see table below).  While I included gas production in the table, EOG flared nearly all of its gas from these wells, so I didn’t include it in the economics.

Source: Colorado Oil & Gas Commission

These wells were all drilled by EOG between 2010 and 2011.  This data shows us that after 86 days, EOG’s average well will produce approximately $2.3 million in revenue (at $90 oil) or 42% of the overall cost of a well (again this doesn’t include gas production).  These Hereford ranch wells show low decline rates during the first year, making them economic; however, not nearly as economic as the wells the company is drilling in the Bakken and the Eagle Ford.  One would think an experienced Niobrara operator like Noble Energy (NBL) would be interested in this acreage.

So Chesapeake and GMXR have thrown in the towel and EOG is largely on the sidelines, who else is trying to figure out the Northern DJ Basin?  The aforementioned Noble Energy.

Noble Energy

Noble’s onshore U.S. legacy assets are in the Wattenberg field, so the company is familiar with the complexities of drilling in the Niobrara.  NBL currently holds 410k net acres in the Wattenberg and 230k net in the Northern DJ.  Its decision to divest non-core assets in the Permian, mid-continent and North Sea earlier this year to focus more on the Niobrara and various international plays certainly gives the play a boost of confidence.  To combat the Niobrara’s various complexities, the company has been experimenting with spacing units down to 40-acres on its horizontal program, in addition to an extended reach lateral program where it’s drilling 9,000 foot laterals.

Noble is seeing better results on its 40-acre spacing program, with the theory that smaller spacing units are breaking up more rock which is increasing permeability.  Its first extended reach lateral (unclear where this was drilled) cost $7.5 million and averaged 400 BOEPD during its first year of production.  NBL expects it to produce 750 MBOE, a success that has the company testing more of these wells moving forward.  The company has already spud more than 190 horizontal wells (40 in Northern Colorado) this year using seven rigs and will add three more rigs by year end.  It’s experimenting with pad drilling as well, which should lead to decreased well costs, providing a boost to the economics of the play.

In the horizontal Wattenberg, the company expects EURs to range from 337 to 350 MBOE based on 30-day average IP rates of 497 to 567 BOEPD (60-80% liquids).  What’s more encouraging for the Niobrara itself is that NBL is seeing improved production results on its last eight Northern Colorado wells with 30-day average IPs of 550 BOEPD (85% liquids) which track an EUR of 310 MBOE.  Don’t hold your breath on these results just yet, as the Northern Niobrara is proving to be about as hard to tame as Afghanistan, but there’s a lot of oil there so they’re worth keeping an eye on.

Anadarko Petroleum

Anadarko (APC) recently pledged to spend $1.0 billion annually during the next several years developing its Niobrara acreage.  In the DJ, the company currently holds 350k net acres in the Wattenberg and 550k net acres to the North.  The company plans to drill 170 Wattenberg wells in 2012, 270 in 2013 and 300 in 2014.  Based on its type-curve, a well that has a 24-hour IP rate of 800 BOEPD will produce an EUR of 350 MBOE and return 100%.  To date, Anadarko’s production has averaged right around its type-curve, and judging from its expected ramp-up, the company seems excited about the play.

Outside of the Wattenberg, Anadarko plans to evaluate its acreage by drilling 30 wells during 2012.  As of November, 2011, APC had drilled 15 wells in the area which produced at an average 24-hour rate of 350 BOEPD.  It’s difficult to read too much into those IP rates, as wells outside the Niobrara have been known to either decline slow or fall off the map.  It’s worth noting that the company has stopped highlighting this acreage in its presentations, which leads me to believe it hasn’t been all that happy with the results.

Carrizo Oil & Gas

Carrizo Oil & Gas (CRZO) just sold 18k net acres Northeast of the Wattenberg for $4,558 an acre, a great value for an area that has struggled to produce consistently.  Pro-forma to the acquisition, the company has 43,400 net acres remaining in the DJ Basin.  To be honest, I wasn’t even planning on looking at CRZO’s production data for this report, but the valuation they received intrigued me.     The company hasn’t hit any big wells on its acreage, but its 30-day average production rate of 289 BOPD (353 BOEPD) is comparable to EOG’s Hereford prospect.  Flaring has decreased on its wells, leading me to believe the company is getting gas pipeline infrastructure in the field as well, which will help the economics.  With a target well cost of only $3.6 million per well, this acreage looks to be more economic than EOG’s.

Source: Colorado Oil & Gas Commission

Other

There’s several other companies, including Bonanza Creek (BCEI) and PDC Energy (PDCE), who are achieving solid results in the horizontal Wattenberg play, but by now you get the point: companies are excited about the Wattenberg, while the Northern portion of the play seems more prospective; however NBL and CRZO’s results in the Northern portion of the play are encouraging. The Niobrara probably won’t blow your socks off, but if you know how to work this sometimes perplexing play you can find economic oil.