According to an October 2012 report by Wunderlich Securities, several midsized independent operators are expanding Wattenberg Field operations with added acreage and new facilities.

The report, “The Wattenberg Field – Gearing Up for Major Expansions,” notes that Anadarko Petroleum Corp.’s horizontal drilling and completion techniques “raised the recovery factor in this basin and, along with Noble Energy, have worked on midstream solutions and pushed gathering projects ahead.”

Drilling Programs

According to IHS Inc., Anadarko’s Wattenberg horizontal program has “estimated ultimate recoveries of 300,000 to 600,000 barrels of oil equivalent per well with a liquids ratio of about 70%, initial well costs of $4 million to $5 million, and future drilling locations of 1,200-2,700 wells.”

PDC Energy Corp., Denver, recently acquired core Wattenberg Field assets from a private party for approximately $327 million and plans 12 Codell wells in 2012. The acquired assets include an estimated 35,000 net acres prospective for horizontal development of Niobrara and Codell: the acquired leasehold is 100% held by production and has an average working interest of approximately 93%. According to IHS Inc., PDC has identified 180 gross proven plus probable horizontal Niobrara drilling locations on the acquisition properties using current PDC spacing methodology of five gross (four net) wells per 640-acre section.

Bonanza Creek Energy, Denver, has added about 5,600 acres in 2012. The report stated that Bonanza “has 360 net horizontal locations, which could be conservative, especially with success in the Codell, the Niobrara C, and downspacing, with large blocks of contiguous acreage that work well for extended laterals; the company plans to drill one well during the fourth quarter of 2012.”

Two solid players, Bill Barrett Corp., Denver, and Noble Energy Corp., Houston, are also active in the region. Bill Barrett “holds about 53,000 net acres in Wattenberg Field and Northeast extension, 22,000 net acres at Chalk Bluffs near the Wyoming border, and 65,000 net acres in the Powder River Basin. Barrett is now actively drilling in the Wattenberg extension and Chalk Bluffs regions with three rigs,” according to the report.

Facilities

Noble is also busy developing its “EcoNode” concept (multiwell pads) on Wells Ranch with a 15-well pilot program.

In addition, Noble opened a state-of-the-art operations center in the heart of the basin in Greeley, Colo., where the company can remotely monitor more than 5,000 wells from the Weld County site.

Noble, according to Wunderlich, has 640,000 Wattenberg acres and is working on production facilities.

SemGroup Corp. is holding an open season (closing on October 22, 2012) with 80,000 Bo/d of capacity anticipated on its White Cliffs crude pipeline out of the field, with service to begin during the first half of 2014. White Cliffs Pipeline currently is a 527-mile, 12-inch common carrier pipeline that originates in Platteville, Colo., and transports crude into Cushing, Okla. The current capacity is 70,000 Bo/d and as of mid-year, the volume was 60,000 Bo/d, according to Wunderlich’s report.