docFinder alert PLS PLS
Week of July 09, 2012Volume 2, No. 26

Niobrara NOW
Players, play extensions, technology, deals and more!



Noble Energy

Wells Ranch : 7 month payout


June 12, 2012


Full Presentation



Bonanza Creek

Tremendous Results


June 15, 2012


Full Presentation


 According to Baker Hughes, as of July 6, 2012, the number of rigs targeting the Niobrara within the DJ Basin of Colorado stands at 44 and remains relatively steady since April 2011.  Of the 44 rigs drilling, 21 are horizontal and 14 are directional; all are classified as development.  This docFinder Alert highlights companies focused on unlocking the riches of the Niobrara which is currently deemed emerging by most of the industry. Companies are using 3D seismic, longer laterals, historical vertical penetrations and other methods to find the sweet spots.  There have been numerous successes as the industry continues to test the area.

Noble Energy is a Pacesetter in the play and leads its latest presentation - NOW - with the DJ basin. NBL projects a 15% annual production growth rate through 2016 from a base of 73 Mboepd (Q1 2012, 53% liquids).  Plans call for ramping the horizontal rig count from 7 today to 9 by year-end. A hefty 35% (or $1.3 billion) of total 2012 Capex is dedicated to this area.  Slide above left highlights the Wells Ranch AE29 - 68HN well.  This well experienced a dramatic improvement in recoveries attributed to a long lateral (9,120 feet completed with a 39-stage completion) scoring over 100% after-tax ROR and a seven month payout (well costs are $7.0 to $8.0 million).  Noble's Northern Colorado area is currently experiencing the best economics - beating out the Wattenberg core and extension areas. As evidence of its commitment to the Niobrara, Noble just sold $617 million of its Mid-Con properties to Unit Corp. to provide acceleration of its Niobrara oil play

Slide above right is from Bonanza Creek Energy, which experienced a 96% increase in production during Q1 2012 (7,100 boepd) vs. Q1 2011. BCEI has plans to increase its Rocky Mountain production 5X by 2014. The company is in full development mode in the Wattenberg area and in testing mode in the North Park area of the play.  In North Park, Bonanza Creek's type curve indicates 211 Mboe EUR's with 30-day rates of 304 boepd and well costs of $5.1 million.  In 2012, plans call for spending $250 million in the Rockies for 92 vertical wells ($72 million), 24 horizontal Wattenberg wells and 3 horizontal North Park wells ($99 million).   

More HOT slides and data below. 

PLS highlights some additional Niobrara players below including Pacesetter Anadarko Petroleum who benefits from a legacy land grant mineral ownership position.  Also, PDC Energy which provides investors with the highest per share leverage to the core horizontal Wattenberg Niobrara play.  Voyager Oil & Gas just announced its acquisition of Bakken and Niobrara player Emerald Oil and Recovery Energy presents an excellent technical and competitor overview of the play.

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    featured.slides from docFinder

    Slide Slide Slide Slide

    Anadarko Petroleum

    Superior Opportunity

    June 25, 2012


    PDC Energy

    Core Wattenberg

    June 25, 2012


    Voyager Oil & Gas

    Emerald Acquisition

    July 10, 2012


    Recovery Energy

    HZ Niobrara Permits

    June 26, 2012


    Slide above is from Anadarko Petroleum and leads into the presentation regarding APC's US onshore growth plays. In the Wattenberg horizontal, APC has 7 rigs running and had sales of 80 Mboepd in Q1 2012 (a 42% YOY growth in liquids sales). In the core, APC has 350,000 net acres (67% is owned minerals) and is exposed to 0.5 to 1.5 Bboe (1,200 to 2,700 drill sites each with 300 to 600 Mboe EUR). APC's PV10 for a 600 Mboe EUR well is $19.2 million. In 2011, the area yielded $400 million in cash flow over Capex.


    PDC Energy has the third largest lease position (103,000 net acres with 546 drilling locations) in the core Wattenberg Niobrara play.  For investors, PDC offers leading leverage to this play, followed by Noble, Bonanza Creek and Anadarko. Company is planning on dedicating a second rig in Q3 2012 and third in 2013.  Thus far, industry has 69 wells with average 30-day IPs of 300-800 boepd and 10 wells with 800+ boepd.  PDC's results are improving over time and appear to currently be tracking a 400 Mboe type curve.



    On July 9, Voyager Oil & Gas announced a deal to acquire Emerald Oil and Gas for $40 million in stock and assumed debt.  The deal brings Rockies assets including 43,500 acres in the Williston and 45,000 acres in the Sandwash area of the Niobrara (west of Bonanza Creek's North Park area) in Moffat & Routt Counties, CO and Carbon County, WY. In the Sandwash, Voyager gains a 45% WI in a JV operated by Entek Energy Ltd.  Operators in the area, including Shell, Double Eagle and Quicksilver.


    Denver-based Recovery Energy holds 115,000 net Niobrara potential acres, mostly contiguous with 130+ drilling locations. This presentation provides a good geological overview and opportunity scenario across the basin -- both conventionally and unconventionally. Regarding the Niobrara, finding areas with a high level of natural fracturing is the single most critical component of successful production.  Slide above summarizes all industry horizontal well permits in the Niobrara area as of March 1, 2012.  Also shown are key fields in the area and dominant players focus areas. Notice the large 3D shoot (Silo area).


    Full Presentation Full Presentation Full Presentation Full Presentation

    featured.transactions from PLS global M&A database

    07/11/12Unit Petroleum buys Mid-Continent package from Noble Energy$617 MM
    07/09/12MFC Industrial acquires Compton Petroleum - Canada$191 MM
    07/09/12Voyager Oil and Gas buys Emerald Oil and Gas - Rockies$40 MM
    07/05/12DNO offers to purchase Calvalley Petroleum - Yemen$132 MM

    Source: PLS M&A Database

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