Recovery Energy focuses its exploration and development efforts exclusively on the DJ Basin and is headquartered in Denver. The DJ Basin is centered on the eastern side of the Rocky Mountains and extends from south of Denver, Colorado to southeast Wyoming, western Nebraska and western Kansas.

The DJ Basin consists of a large asymmetric syncline of Paleozoic, Mesozoic, and Cenozoic sedimentary rock layers, trending north to south along the east side of the Front Range. The basin started forming as early as 300 million years ago, during the Colorado Orogeny that created the Ancestral Rockies.

Oil and gas have been produced from the DJ Basin since the discovery of oil in 1901 in the fractured Pierre Shale at the Boulder oil field in Boulder County. The DJ Basin currently has more than 20,000 producing oil and gas wells. A 2002 assessment by the U.S. Geological Survey reported that more than 1.05 billion barrels of oil and 3.67 trillion cubic feet of natural gas, notably from the Wattenberg Field, have been produced, from wells across the Denver Basin Province primarily using conventional, vertical methods. (The USGS Province 39 extends somewhat beyond the DJ Basin.)

The Niobrara, which is named for a brittle, shale rock formation thousands of feet underground, and associated formations have been the focus of recent industry activity in the DJ Basin. Niobrara shale oil is thought to be recoverable given the favorable economics of pairing new technologies: horizontal drilling with multi-stage artificial stimulation technology.

Recovering DJ Basin Oil with New Technologies

Horizontal drilling and multi-stage artificial stimulation technology, also called hydraulic “fracturing” or “fracing,” are the key enabling technologies that will allow Recovery Energy to unlock original oil from rock formations – generally with target depths of 6,500 – 9,500 feet. While sophisticated geologic and 3D seismic models enhance predictability and reproducibility over larger areas than historically possible, at such depth, there is typically not sufficient porosity and permeability to allow oil and natural gas to flow from the rock into the wellbore at economic rates.

The emerging DJ Basin Niobrara oil shale fields and other hydrocarbon-bearing formations such as the Pierre Shale, Codell, Greenhorn and Paleozoic horizons are believed to contain substantial recoverable oil reserves that may be effectively and economically exploited through advancing seismic modeling, drilling and completion technologies that continue to be developed and refined.

Horizontal drilling, as opposed to conventional vertical drilling, otherwise known as “long laterals,” are drilled down and sideways to expose more of the well to productive reservoir layers. This technology has been in existence for about 20 years and was utilized for the Silo field discovery in 1991 which has produced in excess of 11 million barrels of oil equivalent from the Niobrara formation.

Newly perfected multi-stage artificial stimulation technology systems are derived from hydraulic fracing which pumps liquid and proppant into a reservoir under tremendous pressure. This improves permeability and creates channels through which hydrocarbons can travel. Cost-effective, high-tech multi-stage fracing completion systems are now capable of mechanically fracing at certain intervals, stimulating several stages in a single day and substantially increasing near-term production. During the past several years, U.S. producers have perfected these techniques in a number of prolific shale plays, increasing both output and efficiency. Recovery Energy’s experienced operations team will be applying the same techniques to unlock the potential of the emerging Niobrara shale oil play in the DJ Basin.