Niobrara a Premier Oil Resource Play

Bonanza Creek Wattenberg Field Target Formations

Bonanza Creek Wattenberg Field – Target Formations – Image Credit:Bonanza Creek Energy

In its January 2013 Investor Presentation, Bonanza Creek Energy (BCEI) called the Niobrara a Premiere Oil Resource Play. Bonanza Creek holds the third largest acreage in the Colorado’s Core Wattenberg field sharing its enviable position with Noble Energy and Anadarko Petroleum.

Bonanza Creek considers its Wattenberg field acreage to be a flagship asset.  The company is focused on developing the Niobrara B and C bench as well as the Codell formation. The Codell formation yields are expected to be very similar to that of the Niobrara B bench wells. The company has over 15,000 prospective Codell formation acres.

Bonanza Creek Niobrara Economics and Decline Curve

Bonanza Creek Niobrara Economics and Decline Curve – Image Credit Bonanza Creek

Bonanza Creek’s strategy for the Niobrara consists of a combination of extended reach laterals and 4000 ft laterals at 80 with acre spacing units. The well economics for 80 acre spacing are an EUR of 312,000 Boe of which 65% is crude oil. A typical 80 acre well will cost 4.2 million dollars.

The company estimates it will produce from 5.3 to 5.8 Million Barrels of Oil Equivalent in 2013 and expects to sell the oil produced from its core Wattenberg field acreage at a discount of $8.00 to West Texas Intermediate crude price in 2013.

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