First, the stratigraphic zones to be targeted are not prolific, (if at all) producers in the Denver Basin, meaning the "carbonates and shales of middle and late Pennsylvanian to Permian age." Importantly, Southwestern says these rocks are in the "oil window", meaning the organic matter in the rocks is at the right time and temperature environment for creating and containing oil.
Other important factors are that Southwestern is first going to drill a vertical hole, called a "pilot hole", probably core it and log it in detail to get a handle on the petrophysical characteristics of the rocks and their hydrocarbon content. Then they will probably back up the hole and drill a "horizontal lateral" hole a few thousand feet long into the best reservoir zone. Then they will probably hydraulically fracture it and finally test it. That all sounds very abitious and expensive. It is, and that is why this interests the explorationist in me. In addition, I think Southwestern knows what they are doing. I'm just reading between the lines of course and have no real insider's knowledge.
Southwestern is very experienced in drilling and geosteering horizontal wells, fracing and then producing them in the Fayetteville Shale in northern Arkansas. Now they are drilling for oil in the Smackover of southern Arkansas and northern Louisiana. As I said, I am very sure Southwestern knows what they're doing, they have a large acreage position in this part of the Denver Basin and they are making a fairly large commitment there. I think this is a new play very much worth watching. I think there are many more plays like this in sedimentary rocks passed over during previous exploration eras becasue of low permeability, not a lack of hydrocarbons.
The following is the article from the Oil and Gas Journal. Good hunting.
Common strata names include the Atoka, Desmoinesian-Cherokee-Excello-Tebo-Marmaton, Missourian, Virgilian, and Wolfcamp, Southwestern Energy said.
The play objectives range in vertical depth from 8,000 to 10,500 feet and are within the oil window. The combined Wolfcamp-Atoka interval is more than 1,500 ft thick.
The primary objectives are alternating low-permeability, 20-100 ft thick carbonates separated by 10-75 ft thick organic-rich, carbonate mudstones with total organic carbon estimates ranging from 2% to 27%. Total thickness of the objective section is 300-750 ft.
Southwestern Energy obtained the acreage for $42 million, and its leases currently have an 85% average net revenue interest and an average 5-year primary lease term that may be extended 3 years.
The company submitted a drilling plan to the Colorado Oil & Gas Conservation Commission earlier this month for approval to spud its first well in the second quarter. This well will be drilled vertically to 9,500 ft and cored and then drilled 2,000 ft laterally.
Southwestern Energy said it could greatly increase activity in the area in the next few years if results are positive.
Surface geologic map of Colorado. The Denver Basin is just north and east of the Rocky Mountain Front, depicted as the north-south trending purple colored outcrops on the map.