2012 should see much increased exploration and production from the Niobrara shale play in eastern Colorado


From the Fort Collins Coloradoan (Bobby Magill):

Companies exploring the shale are operating mostly in Weld County, but Niobrara activity is spreading across the entire northern tier of Colorado and down the Front Range toward Colorado Springs.

“New oil boom. The words stir the excitement in the hearts of landmen, landowners, geologists, engineers, regulators, environmentalists, tax collectors, the unemployed and charlatans. Although oil production from the Niobrara strata began early in the 20th century, the new oil wells in Colorado are causing a land rush and drilling boom in many parts of the state,” Colorado State Geologist Vince Matthews wrote in the issue of the Colorado Geological Survey’s quarterly newsletter “Rock Talk”featured on the Colorado Department of Natural Resources’ website.

New horizontal drilling technology allowing energy companies to tap the Niobrara and make a tidy profit doing it “has raised the hopes of thousands of Coloradans,” Matthews wrote.

The Niobrara shale spreads across northeast Colorado, but it’s only about 400 feet thick and thousands of feet underground. Because the shale is so thin, energy companies couldn’t drill it very efficiently before horizontal drilling technology was developed in recent years. The new technology allows a single oil well to tap an underground reservoir of oil up to 12 times larger than an older vertical well, according to the Colorado Geological Survey…

Matthews warned that some wells have gushed oil while others haven’t, showing that it’s too early in the rush to explore the Niobrara to know if it’s going to prove to be as profitable and lucrative as some energy companies hope. One thing is for sure, however: Oil and gas companies are going to invest billions in the Niobrara in Northern Colorado in 2012 and beyond. Anadarko announced, on Nov. 14, that it plans to drill up to 2,700 new oil wells into the Niobrara shale in the heavily drilled Wattenberg Field in Weld County. Noble Energy, already a big Niobrara player in northern Weld County, told the Denver Business Journal in November that it will invest about $8 billion in exploring the Niobrara and Codell formations in the Wattenberg Field in the coming years. Anadarko spokesman Brian Cain said that the company is “encouraged” by the potential for Niobrara exploration in Larimer County, where no new drilling permits have been issued since March.

From The Denver Post (Monte Whaley):

A special Ward II meeting to discuss hydraulic fracturing in [Commerce City] is scheduled for Tuesday, Jan. 10 at the Landmark Academy gym, 10550 Memphis St…

The Ward II meeting, hosted by city councilman Jim Benson, will feature panelists, including:

– Phillip D. Barber, an attorney with more than 30 years of oil and gas litigation experience.

– Charlie Montgomery, an energy organizers with the Colorado Environmental Coalition.

– Debbie Baldwin, environmental manager with the Colorado Oil & Gas Conservation Commission.

– Jim Jones, general manager, South Adams County Water and Sanitation District.

The meeting will from 6:30 — 8:30 p.m. For more information, contact Benson at jbenson@c3gov.com or 303-288-7011.

Finally, the Arapahoe County Board of Commissioners have decided to pass on the opportunity to set drilling guidelines, according to Carlos Illescas writing for The Denver Post. From the article:

Arapahoe County Commissioners today decided against passing rules for oil and gas exploration, deciding instead to focus on areas the state does not regulate. Those areas would be transportation and other types of infrastructure. The county’s planning and zoning commission had already passed a set of regulation for the commissioners to consider.

But at a public hearing today attended by about 75 people, the commissioners by a 3-2 voted denied an amendment to the county’s land development code to regulate oil and gas. Commissioners Rod Bockenfeld, Susan Beckman and Nancy Sharpe voted against the regulations, while Nancy Jackson and Frank Weddig were in favor of them. The commission also voted to work with state agencies on issues surrounding hydraulic fracturing, or fracking. A committee will also be created to help the county craft rules going forward.

More oil and gas coverage here and here.

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