The basal contact of the Niobrara Formation with the underlying Carlile Shale is a regional unconformity or sequence boundary which formed about 88.5 Ma. Because the Carlile Shale and Niobrara Formation both represent offshore to basinal deposits, most previous workers have suggested that erosion and truncation at the sequence boundary occurred in a submarine environment.

In the present study, 790 well logs penetrating the Niobrara-Carlile contact were correlated in the central Powder River basin, representing an area of 2800 mi². Field studies established the character of the Niobrara-Carlile contact in outcrop. Two sequence boundaries were recognized during log correlation, the older "blue" and the younger "green." These two sequence boundaries define a sequence between the Niobrara Formation and Carlile Shale, referred to as the intermediate unit. The lithology of the intermediate unit is inferred to be shales and calcareous shales based on mud-logging reports and interpretation of geophysical logs. The intermediate unit was observed in outcrop in one or two locations in the Powder River basin area and consists of concretion-bearing microconglomerate.

Isopach maps from the sequence boundaries to a chronostratigraphic surface inferred to represent a paleohorizontal datum (a prominent bentonite layer in the Niobrara Formation) were used to reconstruct the topography of the unconformity. The erosional surfaces are characterized by mappable highs and lows ("thins" and "thicks," respectively, on an isopach map): lows are associated with areas where, based on correlation of cross sections, the underlying Carlile Formation is incised. These topographic lows characterized by incision of underlying units are interpreted as paleovalleys that trend approximately NNW, parallel to, and possibly associated with the Gillette/Keeline structural lineament. The valleys together form what is interpreted to be a