History & Deposition
The Niobrara Formation originated in the middle of North America during late Cretaceous Age (145.5 – 65.5 million years ago). Deposited in what’s known as the “Western Interior Seaway”, the Niobrara Formation is also known as the Niobrara Shale. The Niobrara was deposited during a period of large fluctuations in sea level. With a descending Western Interior Seaway crust, a major marine transgression occurred and created conditions ideal for carbonate deposition.
Activity in the Area
Available land positions are being snapped up by several companies, all trying to get a piece of the action. Improvements in the engineering and geological understanding of the Niobrara will likely result in segregation of specific regional areas for companies to focus on exploitation.
Geology
The Niobrara formation consists of a widespread deposit of interbedded marine chalk, limestone and organic rich shale. Primary lithology in the eastern part of the seaway is chalk and limestone. The interbedded chalk is characterized as brittle and often naturally fractured. Due to this brittle nature, even small structural features can add significant fractured enhancement to permeability.
The Niobrara is a self-sourced hydrocarbon system and estimates of total organic carbon content in the range from 1% to 7%. Oil experiences only local migration, and the play boundary is outlined by a region of thermal maturity. Oil production has come mostly from vertical wells in the deeper (depths of 6,000 to 9,000+ feet), more mature portions of the Denver-Julesburg (DJ), North Park and Powder River basins. Average porosity is typically less than 10% with permeability less than 0.01millidarcy.
The chart depicts the economics of a Wattenberg horizontal well (Wattenberg is a field commonly associated with Niobrara exploration). This illustrates that the more invested in these wells has yielded higher rates of return on invested capital. Primary reasoning behind these higher yields is due to more more-effective completion design, extended lateral sections of wells, and enhanced drilling methods translating into improved rigtime efficiency. The play is mainly being exploited using horizontal drilling, with reported lateral lengths of 3,500 to 5,500 feet, and multistage fracture stimulations with well costs of $3 to $6 million.
Going Forward
Advancements in drilling and completion techniques have led to renewed interest in the Niobrara oil play in the Rockies. Although the reservoir has been productive for more than a century, numerous companies have established large acreage positions in the prospective trend. Using horizontal drilling and multistage-fracturing completion techniques, these companies are all hoping to take advantage of this relatively low-permeability oil reservoir. Although few well results have been made available, due to the early stages of the play development, those that have been released have been encouraging.
Further investigation into improvements of multi-stage fracture completions by way of horizontal well evaluations and better frac placement, is sure to continue the excellent returns being produced from the Niobrara. With Cordax's Logging While Tripping (LWT) system, horizontal open hole logs can be obtained safely, while significantly reducing rig time typically associated with conventional logging operations.
