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News in Niobrara, Which Stocks to Watch

Apr. 04, 2011 4:21 PM ETCVX, EOG, KWK, HPR, CLR, CHRD, REXX, CRZO, EOX
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 With all of the media coverage about the Niobrara shale, we figured it was time to give you some dependable information concerning the topic. As of recently, the a majority of Samson Oil and Gas’ (SSN) land was sold off to Chesapeake (CHK), who then sold it to CNOOC (CEO). With all of this changing of hands, will this effect other projects occuring in the Niobrara? Its very possible! Take a look at what Michael Filloon, of Seeking Alpha, has to say.

Chesapeake is a very large company, and I would normally not include them in this write up as I would be unsure how much its position would effect its bottom line. Due to the Samson move it is difficult to leave them out. Currently Chesapeake has 800000 gross acres and 535,000 net acres. Chesapeake estimates having 3.4 bboe of unrisked unproved resources. This makes it the second largest player in the area. One of Chesapeake’s wells in the Niobrara is producing 705 boe/d (Spillman Draw Unit State 16-1H). Chesapeake still retains 66.7% of its Powder River and D-J Basin holdings (CNOOC holds the other 33.3%).

Noble Energy (NBL) has over 830,000 net acres in the D-J Basin. Noble seems confident this area will be a money maker for some time. With respect to rig count, it has 6 vertical and 3 horizontal. Sometime this year they will increase to 5 horizontal rigs. Noble is currently doing a 3-D seismic of the area to see how big its opportunities are. Net unrisked resource potential of 1.7 bboe. Its Wattenburg field is Noble’s largest onshore United States field. Currently Wattenburg field is 400000 acres. More then 50% of production from here is liquids. Lease operating costs are just $3.50/barrel. This year the horizontal rig program here will increase to 3 or 4 rigs depending on results. Initial results show horizontal drilling increasing production substantially. Nobel has 430000 acres in the D-J Basin. This entry only cost Nobel $480/acre. It is currently doing a 3-D seismic of 1000 square miles in the area. One rig will be working this section until they have more info on resource potential and location. Nobel has stated they will slowly figure completion techniques to make sure they are getting the largest resource possible from the area.

Read the entire article here:  http://turnkeyoil.com/2011/04/03/news-in-niobrara-which-stocks-to-watch/

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