Denver-based independent Teton Energy Corp. has formed a drilling partnership with privately held Targe Energy Exploration & Production LLC to evaluate acreage in the Frenchman Creek prospect of the eastern Denver-Julesburg (D-J) Basin of Nebraska, an area that Teton suspects may yield up to 20 Bcf gross of natural gas resource potential.
The partners plan to evaluate 9,000 acres held by Teton outside of its 266,572-gross-acre area of mutual interest with Noble Energy Inc. The initial tests will target the Niobrara formation at a depth of 2,500 feet.
Targe will carry Teton on a two-well pilot program and a proportionate share of 3-D seismic to earn a 50% interest in the acreage block. Teton will be the project operator. The drilling will use coiled tubing, which Teton said is being successfully used by other operators in the area. Assuming commercial success, the two initial exploratory wells will be followed by infill drilling on 40-acre spacing.
Teton initially acquired more than 180,000 net acres in the D-J Basin in April 2005, and last November it purchased an additional 56,000 acres in the play. The leasehold is believed to be an extension of the shallow Niobrara biogenic gas play found nearby in the Waverly, Bonnie and Republican fields.
In December 2005, Noble agreed to pay Teton $3 million and carry Teton on a 20-well program to earn a 75% working interest. The 20-well earning program now is complete, and Teton retains a 25% working interest.
This year Teton plans to drill as many as 90 gross wells in the D-J basin, along with adding a 2-D and 3-D seismic program.
Teton concentrates its exploration in the Rocky Mountains, and it also holds interests in the Piceance Basin in western Colorado and the Williston Basin in North Dakota.
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