Niobrara Shale

Marathon Oil Reports Q2 2011 Niobrara Update

Marathon Oil (MRO) issued an update on its oil and gas activity in the Denver Julesburg Basin, where the company is developing the Niobrara Shale in Wyoming and Colorado.

Marathon Oil estimates that Niobrara well will cost an average of $4 million to drill and complete.  These wells will produce on average between 200 and 300 barrels of oil equivalent (BOE) per day during the first thirty days of production, and have an estimated ultimate recovery between 250,000 and 300,000 BOE per well.

Marathon Oil reported in a May 2011 investment presentation that the company had 133,000 net acres under lease.  During the second quarter of 2011, the company sold a 30% working interest in Niobrara Shale leasehold of 180,000 net acres for $270 million.  Perhaps during the earnings conference call, the company will disclose additional details on its current position.

Marathon Oil reported that results from two vertical Niobrara wells have been “positive” and that the company spud its first horizontal well in July 2011.  The company plans to add a second operated rig here and drill between eight and twelve gross well in total before the end of 2011.

Noble Energy To Increase Development Of Niobrara In 2011

Noble Energy (NBL) issued an update on the company’s second quarter of 2011 operations in the Rocky Mountains area, where the company is developing the Niobrara Shale.

Noble Energy increased its 2011 capital budget by $300 million and will use part of the funds to increase development of the Niobrara Shale.  The company will now drill 85 horizontal wells here, up 20% from the original plan.

Noble Energy is focused on the Wattenberg field where the company has 400,000 net acres under lease.  The company estimates that it has 600 million barrels of oil equivalent (BOE) of potential resources based on 2,000 drilling locations.

Noble Energy is operating 12 rigs (8 vertical, 4 horizontal) and plans to add a fifth horizontal rig in August 2011.  Noble Energy said that the last twelve Niobrara wells had an average 24 hour production rate of 835 BOE per day and more than 600 BOE per day during the first thirty days.  The company said that these production rates are up by 10% to 15% from earlier wells.

Noble Energy reported that current gross production from the Niobrara Shale is 10,000 BOE per day.  The company recently drilled a well with a 9,100 foot lateral and forty fracturing stages, a record for the play.

Quicksilver Resources To Drill Six Niobrara Exploration Wells In 2011

Quicksilver Resources (KWK) issued an update on its Niobrara Shale exploration program in the Green River Basin in Colorado.

Quicksilver Resources has 313,000 gross acres in the Sandwash area and plans to drill six vertical wells to test the play in 2011. The company believes that the resource potential in this area may total 100 million barrels of oil equivalent.