The evaluation of this acreage began in 2006, when the London Flats well was drilled as a horizontal completion. The well was not economically successful, but a recent review of the engineering of the well by Samson indicated that, as drilled, the well design had several shortcomings, the company said.
In light of the development of horizontal completions in the Bakken Formation, the company has determined that it would be appropriate to re-enter that well and fracture stimulate the Niobrara in order to determine its productive capacity. This would then be followed by a new well, which would be completed in line with the most recent technical developments that have been successful in the Bakken Formation.
Activities by other companies, approximately 15 miles to the south on the border of Platte and Goshen Counties have raised the profile of this prospective formation. Evidence of increased competitor activity and successful completions are abundant, which Samson believes are responsible for the interest that the industry is showing in its Niobrara Formation project.
Over the last several months, Samson has been engaged in discussions with various industry partners with a view toward sharing a portion of the exploration expense of the project via a farmout. These discussions have resulted in an offer to purchase a portion of Samson’s interest at a substantial premium over Samson’s original purchase price for the acreage.
While Samson has not made any final determination to sell a portion of its interest at this time, such a sale could provide additional working capital that would then be available to drill several new wells, to pay down debt or for other purposes. It is, however, Samson’s intent to retain a significant interest in the project in any event.
The Upper Cretaceous Niobrara Formation in southeast Wyoming consists of cyclical layers of calcareous chalk, shale, and marl. Industry experts have suggested that the Niobrara has most if not all of the characteristics for a significant unconventional oil discovery.
