Noble Energy (NBL) held a conference call on October 28, 2010, to discuss earnings and other information for the third quarter of 2010. The company made extensive comments on its activities in the Niobrara Shale, where the company has assembled a position of more than 830,000 net acres.
“We are operating six vertical rigs at Wattenberg and our Niobrara horizontal rig count has grow to three, with two rigs currently in Wattenberg and one on our Southeastern Wyoming acreage…Based on our results today and encouragement about the play, we currently plan to add a fourth horizontal rig in the second quarter next year and a fifth in the third quarter.
“Our net acreage in the basin is now over 830,000, an increase of 80,000 acres since June with the majority of the additions coming from areas outside of Wattenberg.”
“Our plan is to have us doubling our horizontal Niobrara drilling activity next year. We will also continue acquiring 3D seismic adding another 1,000 square miles to the 300 we expect to have by the end of this year.”
“So far this year, we have drilled 15 wells in Wattenberg, two in core and 13 tests in the northern and eastern edges of the field. Recent horizontal well results in Wattenberg continue to be encouraging with the last 11wells having initial 24 hour rates between 550 and 850 barrels of oil equivalent per day with high oil content.”
“Some of the wells drilled on the edges of the field have been in areas we would consider marginally economic for vertical well development making areas that previously didn’t work now by viable with current technology.”
“In total, we’re still planning to have about 30 horizontal Niobrara wells drilled in the Basin this year; around 21 in Wattenberg, about six in Northern Colorado and three in Southeast Wyoming.”
“As we continue to obtain more production history, estimated ultimate recoveries are tracking on average with our 290,000 barrel of oil equivalents scenario. In total, we have 15 horizontal wells on production in Wattenberg including the three wells that were drilled in 2009.”
“Our teams continue to improve drill times highlighted by recent wells with a spud to TD in less than 15 days. On the completion side, while lateral lengths range from 3,300 to 5,100 feet, the number of frac stages per well has increased to 18 to 20 stages.”
“We recently moved one of the horizontal rigs back into the core area of Wattenberg, a few miles from our Gemini well where we will be further testing recovery in the more vertically developed portion of the field…Gemini has now produced over 160,000 barrels of oil equivalent in just seven months and is still producing over 400 barrels of oil equivalent per day with liquids representing 30% to 40% of the volume.”