Noble is obviously liking what it's found in the Niobrara so far.
Noble Energy spending $8 billion to drill Colorado's shale oil fields POSTED: 05/22/2012 04:20:52 PM MDT UPDATED: 05/22/2012 04:24:14 PM MDTBy Mark Jaffe The Denver Post Noble Energy Inc. is expanding its operations in Colorado with $8 billion in investment over the next five years.
The company is developing horizontal wells that stretch nearly two miles through the oil-rich Niobrara formation, which lies beneath a big swatch of eastern Colorado.
Houston-based Noble has expanded its holdings to 880,000 acres and is experimenting with increasing the density of wells drilled from the same pad.
"We are continuing to ramp up and invest" in the Niobrara, Chuck Davidson, Noble's chief executive officer said in an interview. "This is a major area for us."
The company is spending $1.3 billion in Colorado in 2012 — about a third of its capital — and plans to spend a total of $8 billion over the next five years, Davidson said.
Noble is one of three major drillers in the Colorado portion of the Niobrara. The others are Anadarko Petroleum and EOG Resources.
Noble today opened a new operations center in Greeley and plans to double the number of horizontal wells drilled this year to 175, the company said. It employs about 750 people in Colorado and uses 120 contractors with several thousands workers, Davidson said.
To unlock the oil in the Niobrara, drillers sink wells that run horizontally through the shale formation and then hydrofracture or "frack" the rock by pumping in fluid under pressure to release the oil.
Noble has seven horizontal drill rigs in the state and plans to add two more this year, Davidson said.
Most horizontal wells are drilled to about 5,000 feet, but Noble has drilled several to 9,000 feet. At about $8 million each, the long-reach wells are about 60 percent pricier than standard horizontal wells, according to Noble data.
"They are more expensive but you get more bang for the buck." Davidson said.
Noble also has been experimenting with wells that parallel each other through the Niobrara at different levels, and with tighter spaced wells.
"This is what you see in new fields," said Pete Stark, a vice president at consulting firm IHS Inc. "The Niobrara is a complex petroleum system and companies have to figure out how to get the oil out."
The company is using "EcoNodes" drilling pads, which are designed to minimize its footprint and centralize operations.
"It is a way of becoming more efficient," Davidson said.
IHS's Stark said such efforts are in part a response to the issues raised by drilling opponents and environmentalists.
Noble estimates its potential reserves at about 1.4 billion barrels of oil in the portion of the Niobrara focused around Weld County.
Noble has identified about 4,000 drill sites in Colorado. "We are still learning," Davidson said. "It is going to 10 to 15 years to drill this out."
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