With EOG Resources’ (ticker: EOG) 2010 announcement of the Jake 2-01H well flowing a peak rate of 1,558 BOPD, the horizontal Niobrara was established in the Wattenberg Field in Northern Colorado.
But a new area in Northern Colorado is attracting new horizontal Niobrara activity thanks to a few recent gushers. EE3 LLC’s Hebron #3-12H flowed approximately 1,054 barrels of oil in a 24-hour test period, with 400 pounds per square inch flowing casing pressure on a 48/64th-inch choke.
EE3 (Ellora Energy 3) is an independent oil and gas exploration and production company headquartered in Boulder, Colorado with more than 100,000 net acres in the North Park Basin. EE3 LLC is the successor company to Ellora Energy which held over 850,000 net acres in the Hugoton field in Kansas and 71,000 net acres in East Texas and Louisiana. EE3 sold its Hugoton assets to Occidental Petroleum (ticker: OXY) in early 2010 for approximately $250 million. Later that year, ExxonMobil (ticker: XOM) purchased Ellora and its remaining assets for $750 million.
The Hebron #3-12H was drilled to 6,388 vertical feet before being completed with a 4,100 foot lateral. The well was completed with 19 stages of the plug and perforation process using a total of 3.9 million pounds of sand. The record well is located in Section 12, Township 7 North, Range 81 West of Jackson County, Colorado, in the center part of the North Park Basin. EE3 LLC holds a 100% working interest in the well.
In early October, the Rocky Mountain Oil Journal reported EE3 was also drilling the Damfino #2-06H, a stepout to EOG’s Surprise #4-06H well drilled in mid-2010 that came online with a 362 BOPD and 294 Mcf/d. RMOJ reported the Damfino well was originally permitted by EOG in 2008 but no activity was reported. EE3 then purchased 100,000 net acres (presumably from EOG) and re-permitted the Damfino well.
The Hebron #3-12H is the highest reported 24-hour initial production rate of a horizontal Niobrara well drilled in the North Park Basin. What’s even more interesting is the fact the company drilled the well in the Niobrara D bench – a bench not found in the Wattenberg field.
In the Wattenberg Niobrara, the Niobrara B bench has been the most explored/produced and is the most de-risked across the play. The Niobrara A and C benches are still early but companies believe they will be productive. Bonanza Creek Energy (ticker: BCEI) is in full scale development mode of the Niobrara B bench and is beginning to drill Niobrara C bench wells in the Wattenberg Field. However, the company has additional exploration upside in the North Park Basin, where the company owns the second largest acreage position. In a September 2013 investor presentation, BCEI’s North Park Basin estimates were EURs of 211,000 BOE with a well cost of $5.1 million for a NPV10 at $100 oil of $3.9 million. These estimates were from EOG’s 2008 well in the North Park Basin.
A few wells don’t make a play – but the Hebron has certainly perked the ears of oil and gas wildcatters.
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