Like many other recent oil and gas plays, horizontal drilling techniques and hydraulic fracturing have opened up the Niobrara formation to new production possibilities.
Niobrara is mainly a liquids-rich play, namely oil and natural gas liquids.
Estimates from the Oil & Gas Journal put the amount of oil at 500 billion barrels, with about 7 billion barrels of technically recoverable oil. If the 7 billion barrel estimate turns out to be true, Niobrara has more recoverable oil than the famous Bakken formation.
you may have heard whispers of the Niobrara Shale being called the "neo-Bakken." It has received that name thanks to the favorable preliminary estimates for the play and the high quality crude it produces.
Bakken crude, from the region with a reputation for high quality crude, has an average API gravity of 42°, so Niobrara crude could prove to be a refiners dream.
In terms of oil production, the Niobrara is the youngest of the tight oil plays in the U.S.
Based on preliminary studies, though, it may have been well worth the wait.
The Niobrara Shale is believed to have almost 100 billion more barrels of oil than the Bakken,
Its average well costs are about $2.5 million less, and it has a higher recovery percentage, according to the a December report by the Oil & Gas Journal.
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There are also some -ives too. Higher depletion rates. Lower production than anticipated by the major companies.
Keep in mind, this was before AKK "cracked" the Niobrara. So this could be something that takes the formation to a whole new level.
The new-Bakken. Imagine that.
...and AKK is the company with the intellectual property. Could be in hot demand :)
AKK Price at posting:
2.8¢ Sentiment: Buy Disclosure: Held
