Noble Energy Inc. is expanding its
operations in Colorado with $8 billion in investment over the next five
years.
The company is developing horizontal wells
that stretch nearly two miles through the oil-rich Niobrara formation, which
lies beneath a big swatch of eastern Colorado.
Houston-based Noble has expanded its
holdings to 880,000 acres and is experimenting with increasing the density of
wells drilled from the same pad.
"We are continuing to ramp up and invest"
in the Niobrara, Chuck Davidson, Noble's chief executive officer said in an
interview. "This is a major area for us."
The company is spending $1.3 billion in
Colorado in 2012 — about a third of its capital — and plans to spend a total of
$8 billion over the next five years, Davidson said.
Noble is one of three major drillers in
the Colorado portion of the Niobrara. The others are Anadarko Petroleum and EOG
Resources.
Noble today opened a new operations center
in Greeley and plans to double the number of horizontal wells drilled this year
to 175, the company said. It employs about 750 people in Colorado and uses 120
contractors with several thousands workers, Davidson said.
To unlock the oil in the Niobrara,
drillers sink wells that run horizontally through the shale formation and then
hydrofracture or "frack" the rock by pumping in fluid under pressure to release
the oil.
Noble has seven horizontal drill rigs in
the state and plans to add two more this year, Davidson said.
Most horizontal wells are drilled to about
5,000 feet, but Noble has drilled several to 9,000 feet. At about $8 million
each, the long-reach wells are about 60 percent pricier than standard horizontal
wells, according to Noble data.
"They are more expensive but you get more
bang for the buck." Davidson said.
Noble also has been experimenting with
wells that parallel each other through the Niobrara at different levels, and
with tighter spaced wells.
"This is what you see in new fields," said
Pete Stark, a vice president at consulting firm IHS Inc. "The Niobrara is a
complex petroleum system and companies have to figure out how to get the oil
out."
The company is using "EcoNodes" drilling
pads, which are designed to minimize its footprint and centralize operations.
"It is a way of becoming more efficient,"
Davidson said.
IHS's Stark said such efforts are in part
a response to the issues raised by drilling opponents and environmentalists.
Noble estimates its potential reserves at
about 1.4 billion barrels of oil in the portion of the Niobrara focused around
Weld County.
Noble has identified about 4,000 drill
sites in Colorado. "We are still learning," Davidson said. "It is going to 10 to
15 years to drill this out."
