Armada Oil Inc. has signed a geophysical data acquisition agreement with Geokinetics USA Inc. to conduct seismic testing on land in the Niobrara and Casper formations in southern Wyoming, the Houston-based independent oil and gas company said.

The Geokinetics survey will cover Armada’s 26,272 acres in the Laramie and Hanna basins, which are near existing infrastructure, including oil and natural gas pipelines, oil refineries and gas processing plants, Armada said.

“Armada’s front-end investment in an advanced 3-D seismic program is part of our aggressive growth strategy and will further illuminate the Niobrara play, allowing exploration for reserves not locatable by other means and providing the necessary data to develop the new discoveries,” said Armada CEO James J. Cerna. Armada plans to drill two wells in the Niobrara by the end of the year, Cerna said.

At the beginning of 2010 Wyoming ranked 10th in the nation in proved reserves of crude oil and second in natural gas proved reserves, according to the Petroleum Association of Wyoming (PAW). The state collects a 6% severance tax on oil and gas production, in addition to a royalty rate that is typically 16.67% on state leases and 12.5% on federal lands. Wyoming’s former top exploration and production regulator said last year that while the Niobrara will turn out to be a big play, it has been slow in coming to fruition (see Shale Daily, Nov. 2, 2011).

“Technological advances in the last decade have helped create new opportunities in unconventional energy plays, but in order for any company to fully tap the potential and truly make the Niobrara an economic resource play they must successfully translate geological understanding into completions success and determine the most commercially viable completions strategies to ensure long-term production,” said Geokinetics CEO Richard F. Miles.

The number of rigs operating in the Niobrara-Denver Julesburg Basin has more than tripled in the past year, according to NGI’s Shale Daily Unconventional Rig Count. There were 10 rigs operating in the play as of July 6, up from just three a year ago but one fewer than in the previous week.

Geokinetics is performing similar seismic testing in the Marcellus Shale (see Shale Daily, July 9). Geokinetics and Geophysical Pursuit Inc., a data acquisition and licensing firm, are testing an area that includes portions of 18 municipalities in two Pennsylvania counties.