On May 22nd at the UBS Global Oil and Gas Conference Noble Energy presented the results and future plans of their Niobrara drilling program. The company now plans to commit 45% of their capital program or $1.7 billion dollars to exploration and development in the Niobrara play. Noble estimates it will be drilling up to 500 wells a year by 2016 on its properties as they expand into Northern Colorado.
Close examination and breakdown of Baker Hughes Interactive Rig Count statistics for the week of 24 May 2013 shows that the number of wells classified as “Exploration” (otherwise known in the O&G industry as “Wildcats”) has rocketed by over 100% in May as compared to a year ago. Exploration wells are wells that are drilled outside of known and established oilfield boundaries.
These statistics suggest that operators in the Niobrara are now feeling enough comfort with their geologic and geophysical models to explore beyond the comfortable confines of the Wattenberg field where the bulk of Niobrara drilling has occurred to date.
AKK Price at posting:
1.5¢ Sentiment: Buy Disclosure: Held
