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Wyoming Niobrara Development Slow, State Official Says

Early results, albeit preliminary and limited, indicate that the Niobrara play in southeast Wyoming is slow in coming to fruition, according to the state's top oil/gas exploration and production official.

Wyoming Oil/Gas Supervisor Tom Doll told a joint state legislative committee Friday that early results of drilling in Niobrara have turned up only "a fraction" of the supplies coming from a Colorado well that prompted the drilling of the Niobrara in Wyoming. However, Doll told Shale Daily on Monday that eventually he thinks Niobrara will turn out to be another big play.

"We're in the early years of what they went through up in North Dakota [with the Bakken] trying to find the key that will unlock the treasure chest for he Niobrara like they eventually did in the Bakken," Doll said. "Part of it is intersecting those natural fractures that exist in this shale and finding out where they are using microseismic work during fracking, using more 3-D seismic work on a tighter density."

Wyoming is now competing with North Dakota and Colorado for the services needed to do more drilling. "Drilling rigs are at a premium, and the hydraulic fracturing crews are on the road going through Wyoming all the time now, and some of these operators just catch them as they go through. It's just a little bit different than from the past when there always seemed to be rigs available.

"I still think this is a heck of a resource, going over most of the eastern half of Wyoming, and we're seeing some great potential in these tight oil sands that were previously drilled vertically [in the 1960 and 70s], and now they're going back in horizontally and making some pretty good wells. The Niobrara will come around, but it just won't be at the pace everyone thought it would be."

Doll told lawmakers on the Joint Minerals, Business and Economic Development Interim Committee meeting in Cheyenne that there is not a lot of drilling ongoing in the Niobrara, and it is because the wells are "not coming in as strongly" as people anticipated they would.

"I was hoping we would have seen a lot of more drilling activity than we have through this past summer," he said. "It is just a matter of whether people are going to invest their money in the Niobrara or hit more of a sure thing. Some of the operators, of course, are heavily invested in the Bakken Shale."

Bruce Hinchey, the head of the Petroleum Association of Wyoming, echoed Doll's assessment, noting that low production rates are discouraging companies from drilling additional wells more quickly in the southeast parts of the state. The rate will only pick up when companies start getting better results from current activity, Hinchey said.

Doll estimates that at any given time there are between four and six rigs working in Laramie, Goshen and Platte counties. He said the Oil and Gas Conservation Commission has issued 400 permits to drill in the Niobrara, but so far only 66 wells have been completed in the eastern half of the state.

More than half of those wells are not in the southeast, but are located in Converse County, Doll told the legislative committee.

In comparison to EOG Resources' Jake 2-01H well in Weld County, CO -- which started the Niobrara interest two years ago when it produced at the rate of 1,500 b/d, and continues at the 250-300 b/d level now -- the Wyoming Niobrara wells have started at the 400-700 b/d range, dropping to half that in three months, and dropping in half again in four to six months, Doll said.

Nevertheless, Doll said he expected drilling to continue in various multi-county areas during the rest of this year. Hinchey told the lawmakers that the oil/gas companies have always cautioned officials about the Niobrara potential in Wyoming. He said it is not the equivalent of something like the booming Bakken play in North Dakota.

Despite the early lack of encouraging results, Doll said he -- for one -- is "not ready to put a stake in the heart" of Wyoming's Niobrara.

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