In the current oil-price environment we have all seen the tremendous decline in the number of active rigs across the country, in part led by steep attrition in the far-from-market Bakken and the less bountiful non-core acreage in the Eagle Ford. But there have been a few play areas that, though they have certainly suffered from the downturn, have kept activity levels up better than the national norm.Previously we have discussed Oklahoma, led by its STACK and SCOOP; the Permian Basin’s Midland and Delaware basins, and recently the Utica Shale in Ohio.
But there is one play that pops up in a lot of operator presentations and analysis and news that we haven’t touched on recently, the mighty Niobrara, and in particular the oil rich donut of acreage in Weld County, CO.
The rock is always the most important factor, so let’s start there. I asked one of the geologist’s upstairs (Tiffany Guiltinan) to send me some info on what their team has been working on in Weld County. This first image breaks down the different tops that the team has identified and picked throughout the play area (the Chalks and the Marls, etc.), and also the resulting zones (Niobrara A, B, C, Fort Hays, etc.). On the right is an example of the impact faulting can have on a section – in this case the Fort Hays limestone has been faulted out in the second log from the right. She wasn’t sure if that was interesting or not, but I thought it was.
She also sent me a few charts related to the work the team has been doing with corroborating directional surveys to the different zones.
The upper left chart shows that the Niobrara B (with 43%) and C (with 23%) are clearly the most popular landing zones. The lower left shows that two thirds of Weld County horizontals are using a toe-down trajectory (more on that later). Upper right shows that most wells have a horizontal length around 4000-4500 ft, and lower right shows that most wells are going north/south or east/west.
If you want a little more background on the geology of the Niobrara, you can refer to Tiffany’s excellent post on the Smoky Hill Member, and Clint Barefoot’s The Niobrara Shale Formation – From Idea to Action in 10 Minutes.
Weld County Production and Drilling
Before we go too much further, lets add a little geography to mix, so we know where we are. For wells that have been brought on line in the past 5 years in Weld County, we see the donut-ring of oil production surrounding the donut-hole gas production in the southwest part of the county.
And looking at the same area, with active permits, we can see where some of the bigger name operators are focusing their activity.
One of the most striking parts of the permit image is the lines of permits that line up straight north/south or east/west. Hmmmm.
If we zoom into the area near Riverside Reservoir in the middle of the map, on the left we see when the permits go north/south, the wells go east west, and then when we overlay our (new) landtrac lease outlines, everything becomes clear. Since Colorado lines up their mineral rights in a PLSS system, lining up your wells along one edge and drilling to the other edge makes total sense.
The Heel and The Toe
I said I would get back to toe-up vs. toe-down trajectory. Consider the following well.
This is a well from that region near Riverside Reservoir. The red line represents the directional survey of the well as ingested and QCed by our data team. The colored areas represent the limits of the various zones as picked and QCed by our team of geologists. We determined the “heel” by selecting the point at which the well achieves an 80 degree from vertical in the survey (the blue point on the left), and the “toe” is the end of the well (the blue dot on the right). So in this case the toe is lower than the heel, whereas had we used, say, 88 or 89 degrees the toe might actually be higher and therefore “toe-up.” Also of interest is the fact that in this case the geological stack of formations is trending downwards , which means the hydrocarbons from the toe are going to be from the top part of the formation (in this case the Niobrara C), while nearer the heal they will be from the middle of the formation. Oh, also this well is drilled at an average azimuth of 88.94 degrees, meaning it is going from the west to the east.
Weld County Rig Activity
Speaking of toes, perhaps we can see a little bit of an upturn at the toe of this chart of rig activity in Weld County?
On the left we see the larger class rigs, capable of making the turns and keeping on schedule, have come to dominate the landscape, and on the right we see that, as expected, PDC, Whiting, Noble and Anadarko have taken over most of the action.
What do you think? Leave a comment below.
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