East, west and north of Cheyenne, more oil rigs popping up on prairie

More oil rigs popping up around Cheyenne

CHEYENNE, Wyo. — More oil rigs are popping up around Cheyenne, and a few rigs 50 miles north of town probably have reached their target, the Niobrara Shale.

So how much oil is down there? If anyone knows yet, mum’s the word.

Tom Doll, supervisor of the Wyoming Oil and Gas Conservation Commission, said Friday that as far as he knows, no oil has been produced yet, only rumors.

“We’ve heard good, bad and the ugly, if you will,” Doll said.

All eyes are on a handful of rigs in Platte and Goshen counties north of Cheyenne that have been in a lengthy completion phase, the final phase before production.

Companies large and small have spent millions this year acquiring state and private minerals leases in southeastern Wyoming, northern Colorado and western Nebraska.

They’re betting that a combination of drilling techniques can unlock oil from the Niobrara. The shale formation is similar to the Bakken Shale in western North Dakota, scene of booming oil production for the past few years.

The first wells to produce oil from the Niobrara Shale should help answer a big question for investors: Boom or bust?

The answer might not come for several more months. Wyoming allows companies to keep production for exploratory wells confidential for up to six months.

Wyoming has issued permits for more than 120 oil wells in the state’s southeast corner so far this year. Many of those wells are marked as “confidential” on the production page of the commission website.

Confidentiality helps companies when they negotiate additional leases, said Bruce Hinchey, president of the Petroleum Association of Wyoming.

“They don’t want everybody to know how good or bad it might be,” Hinchey said Thursday. “I would love to know.”

Companies receiving drilling permits in the area north of Cheyenne include EOG Resources Inc. and Bill Barrett Corp.

Drilling has begun for at least five oil wells near Cheyenne. They include a rig drilling for QEP Energy Co. a few miles west of Cheyenne.

The rig is easily visible from Interstate 80, not far from some wind turbines.

“This is our first test in the area. QEP’s future activity will be dependent on the results of the initial well,” company spokeswoman Emily Kelley said by e-mail.

The well is among the confidential ones on the commission website.

State records show that Rex Energy Rockies LLC and Simray Production Co. are drilling four wells east of town. They include three begun within the past six weeks.