Recovery Energy, which controls some 125k gross acres (112k net) of mostly long-term leases on highly concentrated and largely contiguous sites in Colorado, Nebraska and Wyoming, where the company has executed a pure play strategy focused on the prolific formations in the Denver-Julesburg (DJ) Basin, reported today that they are participating in PDC Energy’s new Richter #34M-203 horizontal well, drilled immediately adjacent to RECV’s North Wattenberg prospect.
Currently RECV is doing production and cash flow from the Cretaceous “J” Sandstone, but they also has a spectrum of unconventional horizons, including the Niobrara Oil Shale and Codell Sandstone to choose from (also the Permian Admire and Pennsylvanian Desmoines), with strong prospectivity for other hydrocarbon formations like the conventional Wykert Sandstone. PDC’s Richter #34M-203 is targeting the Niobrara “B” Bench and is one of a series of such wells (RECV has no working interest participation in the other wells) being drilled in the eastern half of the section from the pad, wells which also have targets in the Codell.
This is a nice feather in RECV’s cap that establishes the value of their leasehold and the company has been granted working interest here due to the proximity of the Richter #34M-203 wellbore path as per COGCC stipulations (Colorado Oil & Gas Conservation Commission). With Q4 this year slated for completion of the new well, which was sunk to a depth of just over 11.8k feet, Recovery Energy’s half of the section is now looking seriously hot.
President of RECV, Avi Mirman, pegged Q1 2014 for joint operations to be underway on their half of the section and also praised the logistical sophistication of PDC’s extensive development activities in the DJ Basin thus far, clearly encouraged by RECV’s chance to participate in the well and by the obvious implications for the company’s own production potential here. With a multiplicity of conventional and unconventional targets already identified on the company’s leasehold, this participation reinforces RECV’s strategy of advancing via low-risk opportunities in the region. Given the serious technological leaps in 3D seismic analysis and multi-stage fracking, the DJ Basin has really opened up in recent years and RECV has an impressive eight plus decades of experience in their management team, spanning all aspects of the industry to capitalize on as the ball keeps rolling.
Big news for the company’s North Wattenberg prospect and today’s announcement comes shortly after their report of having finalized agreements to increase working interest participation in the South Wattenberg prospect 320-acre spacing unit (where drilling is also set to commence in Q1 next year) to 63%. RECV anticipates a 14 to 18 well program in total between their two primary Wattenberg prospects and the potential upside here from a fusion of ongoing/successful conventional production and an unconventional drilling program with established targets, should really turn the heads of potential investors.
To get a closer look at Recovery Energy, Inc. visit www.RecoveryEnergyCo.com
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