niobrara have we done enough, page-30

Started this thread back in August 2010 back when the Niobrara shale was only starting to get some attention in Southeast Wyoming near the Colorado/ Wyoming border (Goshen, Laramie & Platte County).

Over the last 2 years, the Niobrara Play has not been known for it's consistency and predictability with Operators having a tough time finding the right places to drill, even after snapping up thousands of acres of mineral leases all over southeast Wyoming.

However, a lot of progress has been made more recently and the play has started moving up north towards Converse County (next to Natrona County where our Grieve Niobrara acreage is located in the Wind River Basin) and Campbell County (next to Sheridan County where our Ash Creek acreage is located and where 2D seismics have recently been performed to get a better understanding of the Niobrara formation that lies beneath our Ash Creek acreage in the Powder River Basin). Refer map below.

As per the article below dated 13 August 2012, Cheasapeake now claims to have "cracked the code" with numerous wells in the Powder River Basin in Converse County.

Niobrara production, permitting on the rise
August 13, 2012 8:00 am
By ADAM VOGE Star-Tribune energy reporter

At least one oil and gas company claims to have figured out the tricky Niobrara shale play in the Powder River Basin in Wyoming.

Chesapeake Energy executives told investors Tuesday that results from the basin are picking up.

“In the Powder River Niobrara play, we’ve finally cracked the code with numerous recent wells” into newly identified drilling areas, said Steven Dixon, Chesapeake’s chief operating officer and vice president of operations and geosciences.

If the Wyoming Oil and Gas Conservation Commission’s production and permitting numbers are any indication, the company won’t be alone for long.

Nearly 430 drilling permits — which precede but don’t guarantee actual wells — have been doled out for operators in Campbell and Converse counties already this year, just less than 2011’s total of 485 permits. In 2010, drillers in the two counties requested only 168.

The numbers seem to indicate growing interest in the area, including wells sunk into the Niobrara, which has at times confounded drillers. The Niobrara formation is known for hot spots, according to interim state oil and gas supervisor Bob King.

“It’s not just a blanket formation,” he said. “You have to apply some geology and engineering.”

But technology has improved — leading to deeper horizontal wells produced faster than ever. The techniques can help find the most oil-rich spots in the formation.

“I think as operators refine completion techniques, specifically with length and ability to steer laterally, the geology is more favorable,” King said.

According to Oil and Gas Conservation Commission data, operators in the Powder River Basin have produced the equivalent of about 800,000 barrels of oil in the Niobrara formation in 2012, already nearing the 843,000 produced last year. Most data reported by producers is current through the end of June.

Some wells previously averaging mere hundreds of barrels per day now produce thousands.

Returns have been solid in other area formations. Operators have produced more than 3 million barrels of oil and gas from the Turner and Sussex formations this year, holding steady with a much-improved total last year.

The Niobrara results are a vast improvement over recent history. In 2010, the Niobrara in the basin produced only about 170,000 barrels. Operators produced about 1.6 million from the highest-producing formation in the area — the Sussex.

Jobs are also on the rise, according to data released Friday.

Employment in the state rose by 2 percent in the fourth quarter of 2011, according to research by the Department of Workforce Services. Mining — which includes oil and gas — was a driver of job growth especially in Converse County, which added 6 percent more jobs.

And preliminary data shows the trend continuing: Wyoming operators added about 2,100 jobs in mining, oil and gas, the largest employment sector increase in the state in the first quarter of 2012.

The production numbers are a good sign for area producers, said Petroleum Association of Wyoming President Bruce Hinchey.

“This is certainly real good news compared to what it was,” he said. “It’s going to bode well for the state.”

http://trib.com/business/energy/niobrara-production-permitting-on-the-rise/article_6d2ba3f7-5894-51e6-87e2-3c39617cb6ab.html?comment_form=true

In another blog site covering the Niobrara, Cheasapeake's more recent peak production rates from 3 wells in the Niobrara in Converse County were as follows:

Combs Ranch 1-H - 2,460 BOE per day, composed of 1,120 barrels of oil, 575 barrels of natural gas liquids and 4.6 million cubic feet of natural gas per day.

York Ranch 1H – 1,950 BOE per day, composed of 1,020 barrels of oil, 370 barrels of natural gas liquids and 3.4 million cubic feet of natural gas per day.

Northwest Fetter 1H - 1,460 BOE per day, composed of 1,150 barrels of oil, 125 barrels of natural gas liquids and 1.1 million cubic feet of natural gas per day.

http://niobrarashale.typepad.com/

While it's definitely still early days, at least the play is moving in the right direction towards Natrona and Sheridan County. Bill Barrett is currently drilling into the Niobrara formation in the Wind River Basin in Natrona County near our Grieve acreage. Will be very interesting to see how successful they are.

All the best to all holders.