ConocoPhillips has accelerated its exploration program in the Niobrara with its petition to the Colorado Oil and Gas Conservation Commission for 15 new spacing units in Arapahoe County. The drilling and spacing unit request will be decided by the COGCC at hearings on Mar, 5 and 6, 2012. This petition combined with a bid to the Colorado State Land Board for leases on the Lowry Bombing Range constitute a large commitment to this area. The bid for the Lowry Bombing Range was the highest in state history at $6,500 an acre and a 20% royalty.
These new unit requests build on the purchase of leases from Lario Oil and Gas in 2011. The new spacing units are nearby or adjacent to the original Lario wells, some of which have been drilled but whose production results are still held confidential by the COGCC.
It is notable that the spacing unit requests include, for the first time outside the prolific Wattenberg field, an option to drill a second horizontal well in the spacing unit. This requested option could indicate that ConocoPhillps has data to suggest that these wildcat wells have a good probability of being highly successful. If the 2nd horizontal well option is exercised in each requested spacing unit, up to 30 wells could be drilled.
The new request for spacing units are listed below can be found on the COGCC March Docket:
Request for an order to establish 15 approximate 640-acre drilling and spacing units consisting of Sections 29, 34 and 35 of Township 4 South, Range 64 West, 6th P.M., Sections 1, 3, 4, 5, 14, 23, 24, 25 and 36 of Township 5 South, Range 64 West, 6th P.M., and Sections 18, 19 and 30 of Township 5 South, Range 63 West, 6th P.M., and authorize a horizontal well with the option to drill a second horizontal well in each proposed unit, for the production of oil, gas and associated hydrocarbons from the Niobrara Formation.