URTeC: 1968860

Niobrara Analogue Study

Samuel Huisman* and Benjamin Lascaud
ConocoPhillips, Houston, TX
Copyright 2014, Unconventional Resources Technology Conference (URTeC) DOI 10.15530/urtec-2014-1968860

This paper was prepared for presentation at the Unconventional Resources Technology Conference held in Denver, Colorado, USA, 25-27 August 2014.

The URTeC Technical Program Committee accepted this presentation on the basis of information contained in an abstract submitted by the author(s). The contents of this paper
have not been reviewed by URTeC and URTeC does not warrant the accuracy, reliability, or timeliness of any information herein. All information is the responsibility of, and, is
subject to corrections by the author(s). Any person or entity that relies on any information obtained from this paper does so at their own risk. The information herein does not
necessarily reflect any position of URTeC. Any reproduction, distribution, or storage of any part of this paper without the written consent of URTeC is prohibited.

Summary

ConocoPhillips built its position in the D-J Basin Niobrara play between 2010 and 2012 with current leasehold of
approximately 130,000 net acres south east of Denver. Envisaged as a new play extension to Wattenberg Field,
based on a thermal anomaly in Arapahoe County, early production expectations were based on the aggregate of
Niobrara horizontal wells across the basin. Production results from early COP horizontal wells were difficult to
compare with aggregate D-J basin production, and demanded a more granular approach to analogue selection. With
the goal of identifying geologically comparable well groups, ConocoPhillips Niobrara Exploration team assembled
a database of 800+ horizontal wells and 1500+ vertical producers, paring down potential analogues by thermal
maturity, API gravity, fractured reservoir, petrophysical properties, lateral length and completion type.
Petrophysical parameters were mapped across the basin in > 3000 wells, and extrapolated to all horizontal producers
to enable cross-plotting with production rates, EUR estimates from decline curve analysis and fluid properties.
Sensitivity analysis revealed meaningful trends in well orientation, API gravity, proppant volumes, target horizon
and the relevance of oil in place, which helps focus the appraisal program and identify critical uncertainties to test.
Selecting analogue wells based on reservoir properties and comparable well design was critical to calibrate reservoir
simulation models to better forecast production from horizontal wells in the area of interest.

Introduction

Wattenberg operators started completing the Niobrara interval in the early 1980s, initially commingled with the
Codell sandstone, utilizing large fracture stimulations in vertical wells. In 2009, horizontal drilling technology was
tested in the Niobrara, and combined with multi-stage fracs, proved viable stand-alone targets in the Niobrara
chalks. Inspired by the success of horizontal Niobrara wells in Wattenberg field, ConocoPhillips Lower 48
Exploration group began looking for play extensions to the proven Wattenberg Niobrara play. Early assessments by
COP focused on the linkage between high initial rates and net pay, as defined by a resistivity cutoff and
petrophysical analyses. COP concentrated leasing efforts to the south of Denver, with the goal of realizing similar
rates, fluid properties and reservoir pressures to the successful Niobrara horizontals northeast of Broomfield, and in
Hereford field. Portions of Arapahoe County near the former Lowry bombing range offered an intriguing analogue,
with chalk intervals displaying more than 40 above a 20 ohm*m resistivity cutoff, a metric which delineated strong
IPs in the high-activity portions of Wattenberg and Hereford fields. From 2010-2012, COP assembled an acreage
position of approximately 130,000 acres, through a combination acreage acquisitions and public lease sales. Initial
exploration wells were premised with production type curves developed from an aggregate of all Niobrara horizontal
wells in the D-J basin, including Wattenberg field but also Hereford, Silo and East Pony fields. Completion designs
of COPs early Niobrara exploration wells were driven by company experience in the Bakken field, and also
patterned after typical well design in the core of Wattenberg field. However, early production results from the first
few horizontal Niobrara wells did not match predictions. In 2013, ConocoPhillips Lower 48 Exploration assembled
a team to refine selection of analogue wells, with the goal of developing more appropriate type curves for COPs
acreage position, the Summit prospect. The aim of the analogue would be to understand whether COPs horizontal
wells were should perform on par vs. analogous producers, or whether the Summit prospect was a geology distinct
play type.
URTeC: 1968860 2

Figure 1: Niobrara Analogue Study AOI, and Niobrara wells in the D-J basin (@2013)

Method

With the aim of identifying analogous play areas to ConocoPhillips Summit prospect, in Arapahoe and Adams
Counties, the team framed up the study with the following objectives:

Define Area of Interest and Define available data

Describe an AOI including all of the fields/areas used in ConocoPhillips original type curve generation, plus all
other known Niobrara producers, as illustrated in Figure 1.

Assemble wells from available public data (n >50,000 wells in AOI).

Map structure and gross isochore for Niobrara zones; refer to Figure 2 for COP nomenclature of chalks and
marls, which is distinct from other Niobrara operators. Number of wells with gamma ray and/or resistivity for
structure mapping= 8930. Well-based structural interpretations were merged with regional 2-D seismic grid and
published fault trends.

Develop a petrophysical model for the Niobrara chalks, marls, Ft Hays Limestone & Codell. Select wells with
appropriate log suite (GR, induction/resistivity and density) from available public data to meet input criteria of
model (n = 5730 wells; refer to Figure 3).

After analysis by petrophysicist (n= 3120 wells), map reservoir properties (Sw, porosity, net pay, modeled
TOC) across the basin.

Reservoir property grids were interrogated at bulls eyes, with artifacts typically relating to bad log data
(improper curve scales entered; inaccurate digitizing from paper-copy logs; wash-outs and cycle-skips). Where
possible, interpreted curves were amended; many wells were dropped from mapping due to irreparable log
curves and also due to time limitations. Final reservoir property maps were based on n= 3078 wells;
representing a wide scatter across the D-J basin. COPs Summit prospect area was characterized by 275 vertical
wells over the acreage; 45 wells over Silo field; 35 wells over Hereford field and 112 wells over the East Pony
field. The Wells Ranch area of Wattenberg field, which saw particularly high levels of development drilling
in 2013, was characterized by 275 wells with petrophysical interpretations.

In a parallel process, thermal maturity trends were assessed across the basin to identify which fields (or portions
of fields) most closely matched ConocoPhillips Summit prospect. Optical maturity (vitrinite reflectance) and
URTeC: 1968860 3

Tmax (from Rock Eval) were culled from USGS reports, commercial databases (e.g. GeoMark) and from
COPs proprietary dataset, comprising 62 points in total, displayed in Figure 4. Much of the public maturity
data had a wide range of uncertainty, owing to limited meta-data; some points were comprised of a single Ro
value with no commentary on ranges of observed reflectance or number of optical samples interpreted. To
reduce uncertainty on maturity estimates, COP added new samples taken from public cores (over Wattenberg)
and from new cores which COP cut over the Summit prospect in 2013.

Figure 2: ConocoPhillips nomenclature for grouping Niobrara Chalks and Marls

Figure 3: Vertical wells used for petrophysical interpretations

URTeC: 1968860 4

Figure 4: Thermal maturity map of D-J basin. Highlighted are Silo, Hereford, East Pony and Wattenberg fields, and the COP
Summit prospect.

Figure 5: Assessment of landing zone for each horizontal well in play (n=688)

Target horizon was determined for each horizontal well, using the directional survey referenced to structure
maps, as illustrated in Figure 5. This method is not as accurate as geosteering, but for wells with no publicly
available LWD gamma ray, this method approximates the landing zone. Using this method, it was estimated
that 80% of wells in the play had been drilled in the C Chalk.

Reservoir properties were extracted from appropriate 2D property grids (porosity, Sw, Net Pay, So*Phi*h, gross
thickness, etc); e.g. for wells landing in C Chalk, the C Chalk porosity grid was applied in Petrel to extract
porosity at Perf Top and Perf Base. The average of these two C chalk porosity values was entered in the
Spotfire database, with same process repeated for all reservoir properties. An illustration of property extraction
in Petrel is displayed in Figure 6. Horizontal wells were spot-checked where LWD data were available, and
also against nearby vertical wells, to ensure the extraction process delivered values within the range of input
data.
URTeC: 1968860 5

Figure 6: Reservoir property grid extraction workflow

Decline Curve Analysis (DCA) was utilized to assess production performance of 697 producing horizontal
wells from the analogous fields. Two approaches were undertaken as sensitivities on decline: use of a floating b
value (no fixed b from well to well), and a fixed b value of 1.2. The latter was suggested by an average of 1.21
from the cumulative probability of the variable b values. Both methods produced very strong agreements in
EUR, and further analysis were conducted with a fixed b of 1.2

A range of filters were applied to the 697 producing wells, including:

o Lateral length
o Stimulation size (pounds proppant/unit length)
o Thermal maturity
o Porosity, water saturation, bulk volume hydrocarbon
o Operator
o GOR
o API gravity
o Geologic area

An example of the effect of the geologic area filter is illustrated in Figures 7 and 8, which display the effect of
structural controls on well performance. Figure 7 includes all 697 producing Niobrara horizontal wells from the
study. Silo and Hereford fields were recognized to have significant structural control which created a
dominance of natural fractures in the reservoirs, leading to a fracture-based production profile in DCA. Figure
8 has wells from Silo and Hereford removed, displaying a more consistent trend of production performance
from the remaining Niobrara Horizontal wells in the D-J basin.
URTeC: 1968860 6

Figure 7: Rate-Time plot for all 697 wells in the database. Meaningful trends are not immediately obvious. Wells from Silo and
Hereford fields are highlighted in green.

Figure 8: Rate-Time plot for Niobrara horizontal producers, with Silo and Hereford wells removed. Distinct trends are now
discernable over 24 months of production.

Analyses and interpretations of the analogue data base will be discussed in the presentation at the URTeC 2014
conference.

Conclusions

Of the 697 producing wells which were analyzed for the database, 73 were selected as analogous to ConocoPhillips
Summit Prospect in Arapahoe County. Criteria defining the analogous well set include: API gravity, thermal
URTeC: 1968860 7

maturity, gas-oil-ratio, well length, proppant volume, water saturation, bulk volume hydrocarbon, porosity and
operator. Wells were only included which had initial production beginning June 2010 to May 2012, to deliver 12
months of production history at the time of this study, and to compare wells with modern stimulation designs.
Interrogation of the database produced familiar trends. Peak rate and EUR generally correlate with thermal
maturity. Thermal maturity generally correlates with API. Lower API gravity fluids correlate with lower quartile
EUR and peak rate. However, sensitivities on the database, using well metadata, produced unexpected trends.

Within the proposed analogue of 73 wells, 23% uplift was observed for toe-up wells (toe of well is more shallow,
TVD, than heel). Using all wells with API gravity 35-45 produced the same trend: 24% improvement for toe-up
wells Well orientation has an apparent effect on EUR as well, with approximately 50% better recovery for E-W
wells vs. any other orientation. Stratigraphic target also produced a significant trend, with peak oil rate and length-
normalized EUR favoring the B or C intervals (COP terminology). Not surprisingly, 110 of the 127 wells are
interpreted to have landed in the C chalk. D chalk wells appear to slightly underperform vs. the C Chalk.

As a sensitivity, selection filters were widened to create an analogue set of 127 wells. A cumulative probability plot
of 6 month cum production for the two well sets (73 wells vs. 127) displayed close agreement, with the larger well
set including a small grouping of wells >80,000 bbl cum. The 10 ConocoPhillips wells on production at the time of
this study fell within the range of the two curves.

However, it was recognized that to move COP wells to the higher EURs on the cum prob curve, more fracture
initiation points were needed to achieve performance on par with wells drilled in the geologically similar areas of
Wattenberg and East Pony fields. Ultimately, interpretation of the analogue dataset drove significant design changes
to COPs completion strategy, resulting in dramatic improvements to well performance.

Acknowledgements

The authors would like to thank ConocoPhillips Lower 48 Exploration and ConocoPhillips Rockies Business Unit
for permission to present this work. Gratitude is also due to members of the Niobrara Analogue Study workgroup,
with specific thanks to: Chris Barrett, Vicki Amir, Amanda Baxter, Aaron Borden, Russ Eckhardt, Brad Evraets,
Phuong Hoang, Randy Mitchell, John Ostergren and Brad Spiller.