Double Eagle updates Wyoming Niobrara, CBM work

Double Eagle Petroleum Co., Denver, and Warren Resources Inc., New York, the two major owners of the Spyglass Hill and Catalina units in the Atlantic Rim of the Washakie basin in Wyoming, have exercised preferential rights to acquire additional working interest in the units from a subsidiary of Anadarko Petroleum Corp.

Double Eagle is the operator of the Catalina Unit. A successor operator to Anadarko for the Spyglass Hill Unit has not been appointed.

Depending on the exercise, if any, of preferential rights to purchase the oil and gas assets by minority working interest owners in the units, the amount of working interests to be acquired by Double Eagle and the purchase price may change slightly.

Double Eagle plans to begin completion of its Niobrara appraisal well in the Catalina Unit in mid-October. The company is completing the well in two stages and plans to frac two zones in the lower Niobrara and three zones in the deeper Sage Break, Dakota, and Frontier gas formations in the first stage and three zones in the Upper Niobrara in the second stage.

The Spyglass Hill Unit requires 25 wells to be drilled before June 2013 to maintain the undeveloped acreage in that unit. The current timing of those wells will be determined once an operator is designated.

Double Eagle said it will evaluate the coalbed methane drilling programs at Atlantic Rim in 2013, depending upon its final working interest and operatorship of the Spyglass Hill Unit. Also, based on results of the Niobrara prospect well completion done in the fourth quarter of 2012 it may drill more Niobrara or deeper formation wells in 2013.

The company plans to continue to participate in developing its acreage in the Pinedale anticline and expects 16 more wells to be completed in 2013.

Double Eagle’s major oil company partner continues to proceed with the development plan and additional seismic shoot in 2013 for the Main Fork project, formerly Christmas Meadows, in Utah. The company is optimistic as to the progress of that 2 tcf target project.

Double Eagle is pursuing strategic mergers and asset acquisitions and is assessing all its nonoperated production and undeveloped acreage for opportunities for joint venture, pooling of interests, farmouts, or dispositions. In line with these objectives, the company has agreed to sell certain of its undeveloped Wyoming leases to a private company for $1.6 million or $2,100/acre. 

Prominent companies such as Noble Energy Inc., Encana Corp., Gulfport Energy Corp., and Occidental Petroleum Corp. are active in the Niobrara play close to Double Eagle acreage in the various Wyoming basins.

South of the Atlantic Rim Niobrara holdings in the Green River basin, Quicksilver Resources Inc. has formed a joint development venture with a subsidiary of Royal Dutch Shell to establish an area of mutual interest covering more than 850,000 acres in the Sand Wash basin in northwest Colorado.

In addition to the Niobrara, other formations in Wyoming such as the Sussex and Parkman are now being accessed with advanced horizontal drilling methods. Some of this activity is targeting known reservoirs, where older vertical wells may have left behind considerable quantities of oil. Double Eagle holds acreage near several of these newly developing plays and is closely monitoring permitting and drilling activities.

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