Niobrara Shale Update From Carrizo
On August 15th Carrizo Oil and Gas gave an update on their operations in the Niobrara shale oil and condensate play. Carrizo currently has 61,500 acres leased in the Niobrara shale play, which is located in northern Colorado, southern Wyoming and western Nebraska. The company reports that they have drilled 24 wells with one rig. Of those, 22 are on production and two are cleaning up after completion and about to be placed into production. Carrizo Oil and Gas has allocated $60 million of Capex for drilling in the Niobrara shale. By comparison, Carrizo has allocated $378 million of Capex to drilling programs in the Eagle Ford Shale in South Texas.
Below is a map of the Niobrara Shale in Weld County Colorado. Note that most of Carrizo Oil and Gas’ 61,500 acres are in Weld County. Carrizo recently acquired 2,700 net high resistivity acres in Adams county. Source: Carrrizo Oil and Gas Presentation
According to the report, estimated EUR of Niobrara shale wells is 250,000 MBOE. Wells are expected to produce 80% liquids and 20% rich natural gas. Company and industry results support 160 acre down spacing, with the potential to go to 80 acres per well or less. Carrizo Oil and Gas predicts improving economics as well costs come down due to utilizing a number of efficiency strategies, including multi – well pad drilling, improved geosteering and possible downspacing to 80 acres. Total well cost in the Niobrara Shale was reported to be only $3.6 million, compared to $7.5MM in the Eagle Ford Shale, where wells are deeper and more frac stages are required.
Niobrara Shale Landowners
Leasing is still occurring in the Niobrara shale, outside of the core areas where most of the leasing activity occurred in the past two years. If you have information on the price per acre paid for Niobrara Shale leases, and royalty percentage, please feel free to comment below this article.
The author holds no positions in any companies mentioned on this blog.