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Armada Oil commissions Geokinetics 3D survey of Niobrara

Thursday, December 13, 2012

Armada Oil of Houston has commissioned Geokinetics to do a 25,000 acre (41.05 sq mile) 3D seismic survey of the Niobrara formation in Wyoming, a possible new area for US shale gas

Houston oil company Armada Oil Inc has commissioned Geokinetics to conduct a 3D seismic survey of more than 25,000 acres (41.5 square miles) of the Niobrara formation, around the Laramie and Hanna Basins in Southern Wyoming.

Armada Oil hopes that the Niobrara will prove to be a similar field in 2012 to how the Barnett Shale was in 2005 - with big rewards to the companies who get in there early.

EOG Resources, Noble Energy, and Carrizo Oil & Gas are already involved in Niobrara shale production.

There have been hundreds of wells drilled in the Niobrara so far, and from the well logs, you can see a high (electrical) resistivity in the 1st, 2nd and 3rd Niobrara chalks, and high organic content marlstone above and below them, the company says.

There are also 140 miles of 1980s 2D seismic recorded, which show that the seismic reflections continue away from the wells.

Moderate costs

As a small company, Armada Oil was seeking an opportunity which it could enter with moderate costs, says CEO James J. Cerna, speaking to Digital Energy Journal.

'You have to be more nimble and sensitive to land costs. It forces a small company to be early into plays.'

There have already been hydrocarbon (oil) shows from wells drilled at the North end of the project area. 'We know there's oil there,' Mr. Cerna said.

Armada Oil has acquired 1,280 acres of leases, with an option to purchase a further 23,700 acres. It has also acquired the engineering data and the 2D seismic.

The company is working together with geologists and engineers who have worked in the region for over 30 years.

The sandstone will probably need horizontal wells and fracking to produce, he said.

The site has very good access for bringing in drilling rigs, with an interstate highway 2 miles away from the anticipated drilling site. 'Access to drilling rigs shouldn't be a problem,' he said.

Nearby there is oil and natural gas pipelines, oil refineries, gas processing plants and oil and natural gas fields.

There is a plan to drill exploration wells and gather cores of all 3 chalk zones for analysis, with the first well spudded at the end of 2012, and the second in the beginning of 2013.

Mr. Cerna founded an Internet venture in the dot com era called NetCurrents Inc and currently lives in Silicon Valley. So his company is unlikely to be conservative on the technology side.

Mr. Cerna is a rated 'Commercial Multi-Engine Instrument' pilot and often flies his executives personally between their office in Oakland, California, and the lease region.

Seismic survey

The 3D seismic survey will be made over the entire 25,000 acres and record data wirelessly.

'It is probably one of the biggest shoots we've seen, with helicopters buzzing around and vans everywhere,' Mr. Cerna said.

The terrain is 'gentle', with one outcrop area, he said. 'So it's not as difficult as it could be.'

The company chose Geokinetics because 'they have a great background,' he said.

'They are on the cutting edge of technology with 3D seismic, and very competitive in terms of pricing. They worked well with our consultants in the past, they had everything that we were looking for.'

Geokinetics is headquartered in Houston and claims to be 'the largest Western contractor acquiring seismic data onshore and in transition zones in oil and gas basins around the world.'

Armada expects to use the latest subsurface modeling tools to work out the optimum direction to point the laterals in the well and exactly where they should be placed, to take advance of the natural fracturing in the ground.

The data processing will be done both in-house and with 3rd parties, to get a range of opinion.

Associated Companies
» Armada Oil
» Geokinetics
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