WPX touts deep-formation drilling success

WPX Energy on Tuesday touted what it is calling a “successful Niobrara shale discovery” that it says could potentially significantly boost its natural gas reserves and production in northwest Colorado’s Piceance Basin.

The company said in a news release that it drilled its first horizontal well into the Niobrara shale formation and it produced an initial high rate of 16 million cubic feet per day. The well is located in Garfield County. Horizontal drilling involves drilling down and then horizontally along the shale formation — in this case, 10,200 feet deep and 4,600 feet laterally.

The company said it since has choked back the well’s production “to optimize reservoir performance and ensure maximum resource recovery,” and the well has produced an average rate of 12 million cubic feet per day over the past 30 days.

Several energy companies have begun drilling exploratory wells into the Piceance Basin’s Mancos and Niobrara shale formations, which underlie the sandstone Williams Fork formation that has been mostly targeted for gas production to date. Both Encana USA and what was at the time Delta Petroleum, now Par Petroleum, have reported some success in their deeper-formation drilling. But the WPX announcement may be the most optimistic by a company to date about local shale drilling prospects.

Its significance is enhanced by the fact that the company has lease rights to about 180,000 Niobrara/Mancos acres underlying its Williams Fork leases in the Piceance.

“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,” Ralph A. Hill, president and chief executive officer of WPX, said in the news release.

He said the Piceance exploratory drilling comes on the heels of WPX’s Mancos shale discoveries in the San Juan Basin, which is located in southwestern Colorado and New Mexico. Two horizontal discovery wells there let the company claim 1.3 trillion cubic feet of additional proved, probably and possible (3P) reserves.

“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.

WPX hopes to drill at least two more horizontal Niobrara wells in the Piceance Basin this year, starting within a six-mile radius of the first well, to help it evaluate how productive the formation is across the basin.

It said other companies “also are delineating the extent of the resource on the eastern and western margins of the basin.”

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