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WPX Energy Makes Discovery In Niobrara Formation

WPX Energy’s (NYSE:WPX) successful Niobrara shale discovery in western Colorado has the potential to significantly increase the company’s natural gas reserves and daily production in ensuing years.

The discovery well produced an initial high of 16 million cubic feet per day at a flowing pressure of 7,300 pounds per square inch.

The well has since been choked back substantially to optimize reservoir performance and ensure maximum resource recovery. Over the past 30 days, it produced at an average rate of 12 million cubic feet per day.

WPX has the lease rights to approximately 180,000 net acres of the Niobrara/Mancos shale play that underlies the company’s expansive leasehold position in the Piceance Basin.

Substantial gathering and processing infrastructure is in place to accommodate additional gas volumes from the area, as is take-away capacity from the basin. Gas produced from the Niobrara and Mancos shales can be processed without modification to existing gas treatment facilities.

WPX has drilled more than 4,000 wells in the Piceance Basin, mostly in the tight sandstones of the Williams Fork formation.

“We have a large-scale position in the Piceance, where we are the lowest-cost, most efficient producer in the basin. We know the Piceance is a world-class asset. Now the results of our Niobrara well are showing that our acreage has even greater reserves potential,” said Ralph A. Hill, president and chief executive officer.

“This exploratory work in the Niobrara and Mancos shales of the Piceance was a logical follow-on to our previous Mancos shale discoveries in the San Juan Basin.

“In the latter half of 2010, we drilled two horizontal discovery wells there that produced at high rates from the same reservoir that we’re delineating in the Piceance. The San Juan results already added 1.3 trillion cubic feet of proved, probable and possible reserves to WPX,” Hill added.

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