Wyoming's oil and gas industry is hopeful that the Niobrara oil shale play will become the next big play, but no estimates are yet available for the total amount of technically recoverable oil reserves the Niobrara play contains.
The U.S. Geological Survey (USGS) has conducted an assessment of the estimated mean undiscovered volumes of hydrocarbons in the Niobrara formation in three Rocky Mountain basins, including the Denver Basin in Wyoming and Colorado; the Power River Basin of Wyoming and Montana; and the Green River Basin in Wyoming and Colorado. USGS has not yet estimated undiscovered volumes for the Niobrara in all Rocky Mountain areas.
The Niobrara formation in the Denver basin contains a mean estimated volume of 40 million barrels of oil, 330 Bcf of gas and 32 million barrels of gas liquids; Power River is estimated at 227 million barrels and 227 Bcf of gas; and the Green River Basin is estimated to hold 104 million barrels of oil, 62 Bcf of gas and 3.7 million barrels of gas liquids.
The current spike in Niobrara shale drilling activity was triggered by EOG Resources success earlier this year with the Jake well in Colorado, said Jimmy Goolsby, geologist and managing partner with Casper-Wyo, based Goolsby, Finley and Associates. The Jake 2-01H well tested at an initial rate of 1,558 b/d, and two other EOG wells drilled in the Niobrara formation, Elmer 8-31H and Red Poll 10-16H, tested at 730 b/d and 1,100 b/d during initial testing. EOG's three-well Niobrara horizontal drilling program has been focused on 100,000 of 400,000 total net acres in the Denver-Julesberg Basin, with oil comprising 82 percent of production from wells.
The Niobrara's full potential is not yet known, due in part to companies' pursuing Niobrara shale programs successfully keeping results to themselves, Goolsby said. In addition to EOG, companies such as Anadarko Petroleum, Chesapeake Energy are seeking to tap the Niobrara formation's potential resources.
The Niobrara oil shale play extends through Colorado, Nebraska and Wyoming. It was previously believed that the Niobrara shale play in Wyoming wasn't producible; however, in southeast Wyoming, the Niobrara shale is more like limestone, which gives the formation porosity or ability to hold hydrocarbons, and is more brittle and makes fracturing easier. Further to the northwest in Wyoming, the Niobrara shale becomes softer and more difficult to fracture and explore for hydrocarbons, said Goolsby.
Niobrara drilling activity is occurring in Laramie, Goshen, Platte, and Converse counties. In Laramie, where the city of Cheyenne is located, 92 applications for permits to drill had been approved for wells set to target the Niobrara formation, according to the Wyoming Oil and Gas Conservation Commission.
In Goshen County, 13 permits have been approved for wells targeting the Niobrara; in Platte County, 56 permits have been issued for Niobrara wells; and in Converse County, 17 permits have been approved for wells targeting the Niobrara.
The drilling boom in the Niobrara shale in Wyoming has been limited by the fact that many land drilling rigs are already working in North Dakota, where operators are pursuing exploration and development of another promising oil shale play, the Bakken shale, said Goolsby. The USGS now estimates that the Bakken formation contains 3.0 to 4.3 billion barrels of undiscovered, technically recoverable oil, a 25-fold increase from the 151 million barrels of oil the agency estimated in 1995.
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