Updated – July 2013
Your land has been leased. There is good reason to believe that there is oil on your land. Now how do the oil companies determine where the wells will go? That is an answer that is a combination of geological factors and suitable drill sites based on land position, and regulations.
Since the Niobrara is a self sourced reservoir, there are a couple of important factors that must be re-visited from the Niobrara Exploration Controls Section.
- We know the Niobrara formation is tight and oil only flows easily when fractured
- We know that your land was chosen because it is in the “oil window”
- We presume that seismic surveys have confirmed natural fracturing of the formation
- We know that horizontal drilling and fracking technology will be used to drain all the oil underneath the surface.
Now what are the main geologic factors that determine well placement and direction?
As you can see from the accompanying diagram, the main stress field present in Colorado and on the Niobrara due to Mountain Building is along a ~ 50 degree azimuth
Since Fractures that parallel this azimuth are the main fairway for oil flow (Merin and Moore, 1986), it only makes sense that horizontal wells oriented in a way that intersects these main fractures orthogonally would be the most productive. While a main stress component is a primary theme, local geological stress controls can also be a component so, the optimal orientation of may change according to local measurements as derived by well logs and seismic data.
Currently in Weld county it is “rumored” that horizontal wells drilled from North to South are the most productive, but it has been said that in the Southern DJ basin, wells may also be productively drilled from East to West.
Based on the stress field present in Colorado, that does not seem an unreasonable hypothesis.
So those are the geological controls, what about land position and field rules?
- Currently Niobrara field spacing rules by the COGCC for horizontal wells are units of 640 acre or perhaps a 1280 acre spacing although any operator may petition for different size spacing units, especially if they are operating outside of the GWA (Greater Wattenberg Area).
It has been suggested that lateral horizontal wells will be drilled on section corners on opposing diagonals and fracked to drain the reservoir. The wells drilled from opposing corners will most likely intersect. From a simple geometric point of view this makes sense, however this does not take into account local geological fractures that control the flow (which is of course the most important factor) when drilling a well and seems a bit simplistic.
This theoretical drill pattern also presumes that access conforms to field rules and acreage is available for a drill pad to set the well in these ideal positions.
The Colorado Oil and Gas Conservation Commission Defines the Rules
In 2011, the Colorado Oil and Gas Conservation Commission made amendments to rule 318A.e that will govern the spacing of horizontal drilling in the Niobrara and other shale plays. Read rule 318A.e at the COGCC.
The COGCC produced a slide package from a presentation made during the hearings about of the new horizontal wellbore rules. We have captured the visuals of the slide package below, but also suggest you view the presentation for higher quality images and supporting descriptions.
Wellbore Spacing Units for Horizontal Wells
- The proposed spacing for horizontal wells is based on the “floating” 160 acre wellbore spacing unit developed for 318A.e.
- “Floating” wellbore spacing units work remarkably well; During the 5 years that Rule 318A.e has been in effect, no well has been contested at a hearing before the Commission
- The “floating” 160 acre spacing unit has been successfully applied by the 4 major operators to over 2,000 interior infill and boundary wells under 318A.e.
318A.e and Wellbore Spacing Units
318A.e introduced the concept of a “floating” 160 acre wellbore spacing unit
Horizontal Wellbore Spacing Units –Example 1
W/2 of Section x (320 acres)
Horizontal Wellbore Spacing Units –Example 2
W/2W/2 of Section x (160 acres)
Horizontal Wellbore Spacing Units –Example 3
SW/4, SE/4NW/4, NW/4SE/4 and NE/4 of Section x (400 acres)
Horizontal Wellbore Spacing Units –Example 4
E/2E/2 of Section yand W/2W/2 of Section x (320 acres)
Horizontal Wellbore Spacing Units –Example 5
E/2E/2 of Section x, W/2NW/4 and NW/4SW/4 of Section y (280 acres)
Horizontal Wellbore Spacing Units –Example 6
E/2W/2 of Section x and NE/4NW/4 of Section z (200 acres)
Horizontal Wellbore Spacing Units –Example 7
NE/4, N/2SE/4 and SE/4SE/4 of Section x, NE/4NE/4 of Sec. z, NW/4NW/4 of Section wand SW/4SW/4 of Section y (400 acres)
Horizontal Wellbore Spacing Units –Example 8
S/2N/2 and N/2S/2 of Section x (320 acres)
Horizontal Wellbore Spacing Units –Example 9
S/2NW/4, NE/4SW/4, SW/4NE/4 and N/2SE/4 of Section x (240 acres)
Recent Trends To Both Large and Small Spacing Units
In an attempt to maximize the production from the Niobrara, a few oil companies drilling in the Niobrara have announced plans to drill under 1280 acre spacing units as well as 40 acre units. These trends can be monitored by looking at the COGGC permit requests.