Houston (Platts)--26Nov2012/406 pm EST/2106 GMT
The US Bureau of Land Management had given its preliminary go-ahead for the development of three large areas of eastern Wyoming that could lead to the drilling of as many as 464 oil and gas wells, an indication that interest in tapping the state's section of the Niobrara Shale is heating up. The BLM Casper Field Office has announced findings of no significant impact and records of decision for three environmental assessments for exploratory oil and gas development in Converse County and a small portion of Niobrara County: the Spearhead Ranch EA, Highland Loop Road EA, and East Converse EA. Project proposals for the three project areas call for allowing producers to drill both horizontal and vertical wells to explore and develop the federal mineral estate. The EAs call for the well pads to be designed to allow up to four wells to be drilled from each pad, the BLM said. Surface ownership in the three project areas encompasses a mixture of federal, state and private lands. The Spearhead Ranch project area encompasses about 240,000 acres, the Highland Loop area about 386,000 acres and the East Converse area 125,000 acres. Under the Spearhead Ranch EA, operators would be permitted to drill 56-224 wells from 56 well pads. The Highland Loop Road EA has a range of 37-148 wells from 37 well pads and the East Converse EA has a range of 18-72 wells from 18 well pads. The BLM prepared the EAs in response to individual notices of staking and applications for permit to drill "from multiple operators" in the three areas, the agency said in a statement. The BLM did not identify the operators that submitted the APDs, although major players in the region include Chesapeake Energy, Sampson Oil and Gas, Anadarko Petroleum, Questar and several smaller independent producers. "The operators have submitted notices and applications to explore existing oil reserves and determine the potential for commercial oil/gas production from the geologic formations within the project areas," the BLM said. Bruce Hinchey, president of the Petroleum Association of Wyoming, said Monday that the central-eastern part of state extending as far north as the and southern Powder River Basin "has seen a lot more interest in last year or two," as operators increasingly turn their attention to the emerging Niobrara play. "Most of it's been for oil development," Hinchey said. "It's good to see these EAs calling for additional development." The increased attention the region is receiving comes at a time when interest has fallen off in more gas-centric parts of the state to the north and west. "With the decreased gas prices, this is pretty good news for Wyoming. It will bring additional revenue into the state," Hinchey said. However, environmental organizations are saying that the BLM should have performed more environmental analysis of the region before opening up large swaths of land for increased energy development. "None of the resource management plans address this type of development. That's a big concern for us," said Shannon Anderson, an organizer with Powder River Basin Resource Council. The BLM should be required to conduct "a full-blown environmental impact statement," rather than the more limited EA, for each of the three proposed project area, she said. "This is big development and the BLM is using the outdated field development plans," Anderson said.--Jim Magill, jim_magill@platts.com --Edited by Richard Rubin, richard_rubin@platts.com