Confidential well status can remain in place for up to 6 months from the spud date and as for the ORRI payments to Samson, it's anybodies guess when Chesapeake are obliged to pay them. Publicly we've heard nothing about these wells or their production figures but you would have to think that privately Terry has a good relationship with the people at Chesapeake and that they would keep him updated on their progress. I guess we'll just have to wait.
Anyway, I found this article this morning in an Indiana newspaper. Apologies if posted previously. Content's don't need analysis from me but one could be tempted to suggest to the author.....you ain't seen nothing yet.
Cheers OMR
From the Daily Reporter Greenfield Indiana
Big investment in Wyoming's Niobrara Shale oil development has yet to equal big dividends MEAD GRUVER Associated Press First Posted: June 02, 2011 - 4:40 pm Last Updated: June 02, 2011 - 7:12 pm AAA
CHEYENNE, Wyo. � A big financial bet by the petroleum industry that the Niobrara Shale will be the next big U.S. oil play has yet to pan out, though the arrival of warmer weather and new geological data could provide a boost.
Anadarko Petroleum, Noble Energy and EOG Resources and others in the industry have spent millions buying up rights to drill the formation beneath southeast Wyoming and northeast Colorado. Even China's state-owned offshore oil and gas company has agreed to invest $570 million for a stake in a Niobrara drilling project run by Chesapeake Energy.
Public and private drilling rights in the Niobrara sold quickly and at top dollar in Wyoming and Colorado all last year.
But Niobrara drilling has yet to take off and wells drilled so far have produced less than those in the booming Bakken Shale in western North Dakota.
Drilling in southeast Wyoming has occurred at about the same pace as last year: 15 new wells so far in 2011, compared to 33 over all of 2010. That remains but a fraction of the state drilling permits issued in southeast Wyoming: 250 so far this year, up from 151 all last year.
Initial production from wells drilled so far has averaged between 400 and 700 barrels of oil a day, much less than many Bakken wells that come in at over 2,000 barrels a day.
"The 400-barrel-a-day wells, they're not going to do very well. They're not going to pay out. The higher ones, 700? Maybe," said Bruce Hinchey, president of the Petroleum Association of Wyoming.
"When you get into the 1,000-2,000, those will probably do all right."
So far nobody has seen a Niobrara well quite like EOG Resources' Jake � a now famous well a few miles south of the state line in Colorado, said Tom Doll, supervisor of the Wyoming Oil and Gas Conservation Commission. That well came in at nearly 1,800 barrels a day in the fall of 2009. Yet producers remain optimistic and new exploration data could help them better pinpoint where to drill, he said.
They now have access to data from geophysical mapping that covered three-quarters of Laramie County last winter, he pointed out.
"As that gets processed I'm hoping that they'll find some naturally fractured trends where they can place their wells a little bit more prudently and with a little more science," he said. "And maybe we will start to see some better producers."
He also predicted that drilling would pick up now that chilly and damp spring weather seems to have passed in Wyoming, making the ground less muddy for trucks and workers.
Drilling into the nearly two-mile-deep Niobrara is expensive, costing $2 million or more per well, and extracting the oil requires a combination of techniques.
They include horizontal drilling and hydraulic fracturing, in which a combination of pressurized water, sand and chemicals is injected underground to break open cracks and improve the flow of oil and gas.
The Niobrara doesn't look to be quite as promising at this point as the Bakken, Hinchey said.
"But I think it's going to be good, steady development," he said. "It's going to mean some jobs and some money for some counties. And more money for the state and schools."
SSN Price at posting:
14.0¢ Sentiment: LT Buy Disclosure: Held
