CASPER, Wyoming—Continental Resources is targeting full-scale development of the Powder River Basin’s oily stacked pay.
Oklahoma City-based Continental’s footprints in the Williston, Anadarko and Permian basins make up the bulk of its proved reserves.
But Continental also sees “a massive resource potential” in Wyoming, said Jake Hunter, Powder River Basin asset manager for Continental.
“With respect to oil-weighted basins, when we entered the [Powder] in late 2020, early 2021, it had the most running room of undeveloped oil inventory,” Hunter told Hart Energy in an interview in Casper, Wyoming. “And that’s still the case.”
Continental Resources President and CEO Doug Lawler recently told Hart Energy that the Powder River Basin has “several billion barrels of resources to be mobilized” across several stacked zones.
Continental produced 27,578 boe/d from the Powder in the first quarter, up 4% from 26,539 boe/d a year prior.
Niobrara, Mowry shales
Continental’s full-scale Powder development centers on the Niobrara Shale, the basin’s most common target today.
“When we look at how to build a scalable asset that’s going to add meaningfully to our portfolio in the future, the impetus was figuring out how to make the shales work,” said Aaron Chang, who was promoted to Continental’s COO this spring.
The top operators in the Powder are aiming for repeatability and manufacturing scale in the Niobrara, which is widespread across the basin.
Operators are generally moving beyond delineation of the Niobrara and entering full development mode, Hunter said.
“You’ve got, at this point, very minor tweaks happening to your densities going into the ground,” he said. “There’s still some optimization to be done on the completion and stimulation side.”
Exploration of the deeper Mowry Shale is in its earliest stages. The Mowry system still holds an estimated 473 MMbbl of oil and 27 Tcf of gas across parts of Wyoming, Colorado and Utah, according to a recent U.S. Geological Survey report.
Continental is still in appraisal mode in the Mowry from its acreage position in Converse County, Wyoming.
“We have less than 10 [Mowry] wells that we’ve drilled on our position,” Hunter said.
Operators are still working to unlock the recipe for success in the Mowry. In situ bentonites create an effective frac barrier within the rock and have thwarted drilling plans in the past.
But like the Niobrara, the Mowry is widespread across the Powder and holds an immense volume of untapped barrels. Anschutz Exploration Corp. and EOG Resources, Wyoming’s top two oil producers, are most actively developing the Mowry today.
“There is going to be a significant amount of sticks there and resource to go get,” Hunter said. “But we’re in the early innings of delineation of the Mowry in Converse County.”
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Prolific sandstones
Stacked around the oily Niobrara and Mowry shales are a slew of sandstone and semi-conventional benches, like the Turner, Shannon, Parkman, Sussex and Teapot.
Horizontal wells landed in these zones can be prolific. Occidental, for example, is reporting compelling results from the Turner bench from its Converse County acreage—output that rivals or exceeds Permian wells.
But unlike the Niobrara and Mowry, these targets aren’t as laterally contiguous. They come and go in strips, bands and pockets around the basin.
While Continental’s development strategy primarily targets the shale formations, the company plans to opportunistically co-develop the sandstone zones when economic, Hunter said.
“While there’s still opportunity on our position to develop quality sands locations, it’s not at scale because it’s not as homogonous as what we have remaining in the shales,” Chang said.
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Services challenges
Powder River Basin wells have displayed compelling results. But physically drilling a Powder River Basin oil well is sometimes easier said than done.
The core of the basin ranks among the most remote, rugged and undeveloped areas in the contiguous U.S. Access to water, electricity and other basic infrastructure is limited, more often a privilege than a given.
Water needs remain a significant challenge for Powder producers. Continental has spent its first few years in the basin building out water and gas-handling infrastructure, Hunter said.
Services needs like drilling rigs, sand proppant, road gravel and other inputs are in high demand but low supply in the basin’s core.
Continental hopes displaying the Powder’s competitive well results and economics will attract a more robust services nucleus to Wyoming over time.
“That way, you get more vendors and there’s a bigger pool to select from,” Hunter said. “That would really help.”
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