The Company is targeting the Niobrara Formation, an unconventional biogenic gas reservoir, at approximately 2,500 feet. Completed well costs are approximately $200,000 with estimated reserves of 0.3 to 0.5 Bcf per well based on 80-acre drainage. If production testing proves successful, development drilling is expected to begin in mid-2004 with first sales anticipated in late 2004. The Company also expects to construct and operate gathering systems to deliver the gas to market.
Peter Dea, President and Chief Executive Officer, commented, "The consolidated leasehold we have established fits our strategy focused on unconventional natural gas in the Rockies with the potential for repeatable drilling of low cost reserves and capitalizing on fully integrated operations. If early exploration tests prove successful, we may have the potential for a fairway-type play which can be enhanced with 3-D seismic and our upstream, midstream and marketing expertise."
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