For those folks playing the Rocky Mountain region, the Cretaceous Niobrara formation lies in wait for the drillbit over a vast area.
It occurs all over New Mexico, Colorado, Wyoming, Kansas, Montana and both North and South Dakota, according to Denver-based Rocky Mountain expert Randy Ray.
Ray, an AAPG Honorary Member and chair of the AAPG House of Delegates, noted that the Niobrara is part of the Cretaceous seaway that once covered the entire middle region of the United States.
The formation is comprised of an interbedded rich source rock and brittle, basically limestone beds usually referred to as chalk. It fractures naturally because the brittle facies is between more ductile shales.
The Niobrara is one of the few formation names used in essentially every basin in the Rockies. In contrast, nomenclature varies for the shale associated with the Niobrara.
Think Mancos, Cody, Steele, Baxter.
Ordinarily a target for oil production, the Niobrara is proving to be more versatile, depending on where you stake your claim.
Recent drilling into the Mancos-Niobrara shales in the Piceance Basin in northwestern Colorado has identified a significant gas resource in these beds in the basin’s southern part. Numerous vertical and horizontal wells have encountered thick shale intervals with pervasive gas saturation that are locally highly pressured, according to AAPG member Steve Cumella, senior geosciences adviser at Endeavour Corp.
“Historically, the Mancos-Niobrara in the Piceance was regarded as something that would likely not be very productive,” Cumella said. “There was a well drilled in the mid-1990s that had huge shows and required 18-pound mud weight to TD it.
“The idea was that it had hit a local fracture zone, and an offset was drilled that made a Mancos well,” he added. “I thought then it was just going to be a fracture play.”
Since then, several companies have drilled enough Mancos-Niobrara wells to demonstrate that the Niobrara gas saturation is a lot more pervasive than previously realized and basically is probably a viable resource play.
“The Niobrara is the lower part of the Mancos in the Piceance Basin, and a number of horizontal Niobrara wells have now been drilled,” Cumella said. “If not for low gas prices, it probably would be one of the stronger shale gas plays in the country.
“It was a big surprise to me and most others that the Mancos-Niobrara could be a viable resource play,” he said, “so that’s a significant development.”
The Piceance Basin, in fact, is a world-class tight gas accumulation where major volumes of gas have been produced from the tight gas sands of the Cretaceous age Mesaverde group. Cumella commented that geological and geochemical data indicate that the Mancos-Niobrara has been a major source of the gas for the overlying Mesaverde.
“This came as a surprise to most everyone,” he noted.
Vertical gas migration from the thick, shaly Mancos-Niobrara likely occurred along fault and fracture zones.
“In the Piceance you have most of the gas being sourced from coals in the lower Williams Fork formation (of the Mesaverde Group), which is the traditional source of Piceance Basin gas,” Cumella said. “The thick coals are highly mature in the basin, especially the southern part.
“This would have generated a lot of natural gas that’s probably the major gas source for the southern Piceance.
“In the northern Piceance, where the well quality is more variable and the thickness of the gas saturated interval is more variable, it may be that the key to viable gas accumulation in the Mesaverde is the sourcing from deeper horizons rather than local.
“The more recent studies have indicated that the Mancos-Niobrara not only is a significant source for Mesaverde gas accumulations, but it may be the predominant source in the northern Piceance.”
Exploration – Looking Up?
The top of continuous gas saturation rises significantly adjacent to major structural features, such as the Rulison Nose, Crystal Creek anticline and Gilson Gulch graben. Mesaverde gas production is commonly enhanced in these areas.
Cumella said that high capillary pressures are required to achieve the low water saturations that have been measured in the Mesaverde sands with their microdarcy permeability. Such pressures could have been provided by vertical migration of highly pressured gas from the Mancos-Niobrara into the Mesaverde.
“In addition, the highly pressured gas would have enhanced natural fracturing during migration and filling of the tight sandstone reservoirs, significantly increasing reservoir permeability,” he said.
Given the protracted slump in natural gas prices, some players here have moved updip, reportedly chasing liquids-rich production rather than the mostly dry gas. Even so, drilling activity has dwindled rather dramatically.
“Drilling has slowed a lot in the Piceance,” Cumella said. “There were a hundred rigs running in its heyday, and my guess is maybe 20 or 30 now.”
It’s not just the drop in natural gas prices nowadays that’s spooky – oil recently has gone wobbly on occasion.
Cumella noted that tight oil play wells can top out at $10 million or more, and a significant prolonged drop in crude prices could trigger some rig lay-downs even in the oil plays.