Wells drilled into the Niobrara Shale formation in Wyoming aren’t producing much oil, and that’s discouraging developers from drilling more wells, a state oil regulator and an industry representative told legislators late last week.
While many well results in the formation are largely still not public, Wyoming Oil and Gas Supervisor Tom Doll said the wells drilled so far are only producing a fraction of the totals from a Colorado well that inspired exploration into the Niobrara in Wyoming.
“The reason we’re not seeing a lot of drilling activity in the Niobrara is those wells are not coming in as strongly as people thought,” he told the state Legislature’s Joint Minerals, Business and Economic Development Interim Committee at its meeting in Cheyenne on Friday.
Bruce Hinchey is president of the Petroleum Association of Wyoming, the state’s oil and gas industry trade group. He said the low production rates are discouraging companies from drilling more wells more quickly in the state’s southeast.
“Until we get some better results, it won’t be at a rapid rate,” he said.
At any given time, there are between four to six drilling rigs in Laramie, Goshen and Platte counties, Doll told the legislators.
While the state’s Oil and Gas Conservation Commission has issued 400 permits to drill into the Niobrara, only 66 wells have been completed in the eastern half of the state. Nearly half of those wells are in Converse County, not in the state’s southeast, Doll said.
EOG Resources’ Jake 2-01H well in Weld County, Colo., started the Niobrara excitement in 2009 when it produced the equivalent of 1,500 barrels of oil a day. It still produces between 250 to 300 barrels of oil a day, the company said in August.
Wyoming’s Niobrara wells start at 400 to 700 barrels of oil a day, slip by half within three months, and slow another half within four to six months, Doll said.
“None of these wells are the equivalent of the Jake-type well that everyone got excited about,” he said.
Converse County hasn’t been just a hot spot for drilling into the Niobrara. Operators are increasingly active at sites between Douglas in Converse County and Wright in southern Campbell County, Doll said.
“I expect that to continue the rest of the year,” he said.
The activity in that area is caused by better production rates from wells drilled into underground formations known as tight sands — the Parkman, Sussex, Turner and Frontier formations, Doll said.
Those wells start out at the equivalent of 700 barrels per day, slide to half that within three months, but sustain those production rates longer than the Niobrara wells in the state, he said.
Hinchey told the legislators he and others have always been quick to caution people about the Niobrara’s potential. Some expected it to be like North Dakota’s booming Bakken oil field, or Wyoming’s huge Jonah natural gas field near Pinedale, he said.
“It is not that,” he said. “And we’ve been saying that all along.”
Doll said the operators in the Niobrara just need some encouragement: some wells producing commercial totals of oil. Until that happens, or enough wells are drilled to know if the play is a good one, it’ll be slow going, he said.
But he’s not giving up hope.
“I’m not ready to put a stake in the heart of the Niobrara in southeast Wyoming,” he said.