HORIZONTAL NIOBRARA PLAY PROCEEDING WITH CAUTION

Nov. 11, 1991
G. Alan Petzet Exploration Editor Caution and careful planning are the watchwords for operators in their approach to horizontal drilling for oil in Upper Cretaceous Niobrara chalk in Colorado and Wyoming. Despite its geologic age equivalence with the Austin chalk of southeastern Texas, the formation has not attracted the same degree of attention or yielded as stunning results as the Austin chalk. Niobrara "deserves a measured approach on the basis of general considerations," says a new
G. Alan Petzet
Exploration Editor

Caution and careful planning are the watchwords for operators in their approach to horizontal drilling for oil in Upper Cretaceous Niobrara chalk in Colorado and Wyoming.

Despite its geologic age equivalence with the Austin chalk of southeastern Texas, the formation has not attracted the same degree of attention or yielded as stunning results as the Austin chalk.

Niobrara "deserves a measured approach on the basis of general considerations," says a new Frontiers series publication by Petroleum Information Corp., Denver.

"Little is yet known about the precise reasons for its sporadic productivity; the exact nature of the fracture system(s) within it; the source and migration history of its oil(s); or the deeper structures and structural trends with which productivity appears associated," PI said in the first part of the two part publication.

Niobrara underlies an area larger than that underlain by the Austin chalk, but Niobrara horizontal drilling so far has proceeded at a guarded pace.

NIOBRARA PITFALLS

Key Niobrara horizontal drilling operators are taking a cautious approach to the play, PI notes.

Nevertheless, Silo field in Laramie County, Wyo., has the largest concentration of horizontal wells in the U.S. outside the Austin chalk play with the exception of the Mississippian-Devonian Bakken play in North Dakota.

Union Pacific Resources Co. is slowing the rate of drilling in Silo field and concentrating more on reservoir evolution. Exxon Co. U.S.A. and Gerrity Co. appear settled on a well by well strategy rather than full scale, multiwell programs, PI said.

Silo field, about 12 miles northeast of Cheyenne, remains the only significant field in the northeastern Denver basin in which Niobrara is the principal reservoir formation.

Before horizontal drilling started in the field in late 1990, Silo field had produced about 1.3 million bbl of oil from about 50 wells, nearly all completed in 1983-86.

The publication said problems with horizontal drilling in the greater Rocky Mountain region stem from specific lithologies such as large thicknesses of shale capable of swelling or sloughing; over-or underpressured intervals; karst, vuggy, or fractured zones capable of causing lost circulation or hole stabilization difficulties; and from the salt/anhydrite, etc.

PRODUCTION FLEETING

Niobrara producing wells have generally not held at high rates for very long periods.

Unlike in the Austin chalk, no obvious, long term oil productive trends have developed in Niobrara.

Most Silo field horizontal wells have 2,000-3,000 ft laterals within the target bench of Niobrara. The wells have cost $1-1.7 million/well.

At mid-1991 crude oil prices, wells would have to produce around 60,000 bbl to pay out.

However, no horizontal well in Silo field had made more than 30,000 bbl of oil through June 5, 1991, while the best wells in the Austin chalk have yielded 100,000 bbl or more within 8 months of completion.

For wells successfully drilled in second half 1990, most of which flowed thousands of barrels during drilling or in the first few days following completion, thereafter capable of 500 b/d or more for the first few weeks, all have fallen to 40 b/d or less within 6-8 months, PI noted.

The cause of rapid decline is not fully understood but appears related to specifics of the fracture system.

The possible role of faulting in fracture generation or enhancement, the idea that complex drape over an irregular edge may create nodal points or lines of stress concentration rather than waves of increased curvature, and other ideas will be addressed in the second part of the Frontiers series to be published later.

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