A New Liquids-Rich Shale On The Rise: Important Data Points For Mancos-Niobrara
A Stealth Play
The Mancos-Niobrara is clearly gaining momentum in the Piceance but still appears very much "under the radar" (similar to where South Cana/SCOOP stood two years ago). The liquids-rich potential of the play is particularly notable. The area has extensive existing wet gas processing infrastructure and takeaway routes that should be sufficient to accommodate initial production volumes from the Mancos should drilling activity begin to ramp up in earnest.
In this note, I would like to draw readers' attention to additional data points that give reasons to believe that productive potential of this new "old" play may prove very significant. The data also shows that a vast amount of exploratory work has already been done, quietly, by the industry, and tangible early success has been already demonstrated. The stage has essentially been already set for an acceleration in activity level.
While it is clearly premature to draw conclusions regarding this new play's ultimate scale and economics, early production data and commentary from operators bring to mind a parallel with Cana Woodford or SCOOP, both highly economic and impactful plays.
Encana Has Been Quietly Drilling Away In The Mancos
Encana Corporation (ECA) has been the most active explorer in the Piceance Mancos, having drilled by far the largest number of Mancos tests - as it appears, at least two dozen in total, and possibly more (some wells are on confidential status).
For obvious reasons, operators often keep results of their test wells unadvertised and may put their recent wells on confidential status. Collecting and interpreting production data on relevant exploration activity in an emerging play is often time and effort consuming can be a real challenge. In that regard, well data provided by Summit Midstream Partners (SMLP), a midstream operator in the Piceance, comes very helpful. The map from a recent investor presentation by Summit (below) shows drilling results for c. twenty Encana's wells. Notable is Encana's Orchard 36-H (ON1) that IP'ed 12.7 MMcf/d and produced a very impressive 2.8 Bcf in the first 12 months (EUR potential on this well - in my rough estimate - may be in a 10-14 Bcf range). Another well, the Mamm 6-11H (J12A), IP'ed 12.0 MMcf/d. The two wells are clear
My guess is one of the big boys that is in the area is the partner behind the farm out and they don't want to be revealed until they get the results of the drilled wells. The June special meeting will be a joint venture with that revealed company for the rest of that acearage or a sale as the results for the wells will be good.
The partner for the 5000 JV is WPX. Deal signed in Nov 5, WPX got a great deal. WPX revealed their well numbers in January. DEJ will get 20% of the 3 Niobrara wells WPX will complete by mid 2014 because o f JV. Not bad, but they could have got more cash than the 350K they received . DEJ's great benefit is the remaining 7000 acres that's 100% theirs plus the 20% will start collecting at no cost on the new 3 wells drilled by WPX in RC area. Also they have many other acres with Mancos/Niobrara potential... Piceance basin and DEJ is going from under the radar to main stage...
I'm thinking along those same lines too , there are just to many heavy producing wells in that area
and the quietness of dej makes me think this could be real good with a big partner who does not want the wells production public yet for competitive reasons.