Southwestern Energy Co., Houston, said it has leased 238,057 net acres in the Denver-Julesburg basin in eastern Colorado where the company will begin testing a new unconventional oil play targeting carbonates and shales of middle and late Pennsylvanian to Permian age.
Common strata names include the Atoka, Desmoinesian-Cherokee-Excello-Tebo-Marmaton, Missourian, Virgilian, and Wolfcamp, Southwestern Energy said.
The play objectives range in vertical depth from 8,000 to 10,500 feet and are within the oil window. The combined Wolfcamp-Atoka interval is more than 1,500 ft thick.
The primary objectives are alternating low-permeability, 20-100 ft thick carbonates separated by 10-75 ft thick organic-rich, carbonate mudstones with total organic carbon estimates ranging from 2% to 27%. Total thickness of the objective section is 300-750 ft.
Southwestern Energy obtained the acreage for $42 million, and its leases currently have an 85% average net revenue interest and an average 5-year primary lease term that may be extended 3 years.
The company submitted a drilling plan to the Colorado Oil & Gas Conservation Commission earlier this month for approval to spud its first well in the second quarter. This well will be drilled vertically to 9,500 ft and cored and then drilled 2,000 ft laterally.
Southwestern Energy said it could greatly increase activity in the area in the next few years if results are positive.