American Oil and Gas Reporter - September 2016 - 66

SpecialReport: Horizontal & Innovative Drilling

Lateral Lengths Growing In DJ Basin
By Al Pickett
Special Correspondent
Like the proverbial cat, the DenverJulesburg Basin in northern Colorado
continues to spring back to vitality, no matter how many times it would appear to
have passed its peak.
"There are more than 20,000 vertical
wells in the DJ Basin," marvels Bart
Brookman, president and chief executive
officer of Denver-based PDC Energy Inc.
"There are more than 1,800 horizontal
wells in the core Wattenberg Field alone.
I have worked in this basin since 1988, and
I am stunned how many times the DJ Basin
has come back to life. We are delivering
more value today than ever."
PDC Energy is the third biggest operator and the basin's most active driller at
present, operating four Ensign automated
drilling rigs, according to Brookman.
The company has about 2,200 legacy
vertical wells and more than 400 horizontal wells in the Wattenberg in Weld County, Co.
Brookman, who says PDC Energy is
continuing to drill longer laterals, says the
company expects to spud approximately
135 wells in the Wattenberg Field this year,
of which 32 percent will be standard-reach
laterals (4,200 feet), 36 percent are

midreach laterals (6,900 feet), and-for the
first time-32 percent are extended-reach
laterals (more than 9,500 feet), which he
says the company refers to as its "two-milers."
PDC also plans to turn about 160
wells on line in the Wattenberg this year,
of which 50 percent are standard-reach laterals, 40 percent are midreach laterals, and
10 percent are extended-reach. "We drilled
standard-reach laterals exclusively until last
year," Brookman comments. "But as we
advanced our drilling and completion
techniques, we started drilling longer. Of
course, that means less surface impact."
Brookman adds that the number of
wells spudded and turned on line is expected to be adjusted as a result of its acreage
trade with Noble Energy.
He adds that PDC's overall production
this year is expected to average 41 percent
oil, 39 percent natural gas, and 21 percent
natural gas liquids.
"At year-end 2015, we listed an inventory of 2,150 proven and probable locations in the Wattenberg, based on 20
wells a section (16 Niobrara and four
Codell)," he continues. "We are testing 2226 wells a section, and that number does-

A PDC Energy rig drills on a 16-well pad near Gilcrest, Co. PDC is developing the Niobrara and Codell formations in the Denver-Julesburg Basin's Wattenberg Field, using
4- to 10-well pads to drill 22-26 wells per section. The company anticipates spudding
135 wells and placing 160 wells on line in the Wattenberg this year.

66 THE AMERICAN OIL & GAS REPORTER

n't depend on the length of the laterals. We
are drilling 4-10 wells a pad, depending
on spacing and land configuration."
Average lateral length of PDC's 2,150
locations is 4,700 feet, which reflects a
combination of its standard- and midreach
laterals.
Maintaining Profitability
Historically, gas-processing capacity
has been a concern in the Wattenberg, but
Brookman says that is less of a problem.
"We have sufficient processing and gathering, helped by the downturn in drilling,"
he relates. "DCP Midstream is our primary
gatherer. Our oil take-away capacity is
more than sufficient. We have multiple
markets for our crude oil, for which we expect a realized wellhead price of about a
$6.50 gathering and transportation differential from the New York Mercantile Exchange price."
Despite the reduced price of crude oil
and natural gas the past 18 plus months,
Brookman says the Wattenberg wells are
profitable. "Well costs have come down
about 40 percent and reserves have gone
up," he points out. "We estimate we are receiving a 30-60 percent return on our
drilling and completion costs."
He says PDC Energy has done a number of things to lower costs and improve
efficiency. For example, 100 percent of the
wells it plans to drill this year will utilize
plug-and-perf completions instead of sliding sleeves.
"It costs about $100,000 more on a standard-reach lateral, but we are seeing a 1020 percent uptick in production and reserves using plug-and-perf," Brookman emphasizes. "It is more efficient, and we have
it down to more of a routine. Some of the
mechanical risks that used to be associated with plug-and-perf have gone away."
Other improvements, he says, include
using monobore drilling, which eliminates
a casing string and has helped cut drilling
time by 50 percent over the past two years.
The company also is testing fluid designs (slickwater versus gels or hybrids),
and is doing some well-orientation studies in parts of the Wattenberg (east-west

American Oil and Gas Reporter - September 2016

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