Prospects good for N.M. oil, gas boom

by Kevin Robinson-Avila 

Preliminary results from Mancos shale wells in northwestern New Mexico are boosting industry excitement about a new oil and gas boom in the region.
    Companies must learn a lot more about the shale formation before any gushers explode, but some of the 22 exploratory wells drilled to date have shown solid commercial potential for oil and gas production, according to industry executives who attended a conference this week in Farmington to discuss production potential in the Mancos play, a previously untapped section of the San Juan Basin.

    WPX Energy Inc.’s director for the San Juan Region, Ken McQueen, said two horizontal wells that WPX drilled in a dry natural gas section of the Mancos are some of the company’s best wells anywhere. Oklahoma-based WPX is one of the nation’s 10 largest natural gas producers.

    “These two wells are in the top 10 best wells drilled by WPX to date,” McQueen said. “They’re quite extraordinary for us.”

    The wells, drilled in 2010, have produced 2 billion cubic feet of gas so far, and will ultimately produce between 5 and 6 billion cubic feet each, McQueen said. That’s substantially more than the 4 billion cubic feet needed for commercial viability.

    “That makes for a very attractive target for WPX to pursue,” McQueen said.

Although the WPX wells are producing dry natural gas, companies are particularly upbeat about prospects for liquid natural gas, and for oil, in other sections of the Mancos, which is snuggled between soft sandstone layers in the San Juan Basin that producers have been exploiting for decades.

    The sandstone layers contain mostly dry gas. The Mancos, however, is divided into three sections in New Mexico — the dry gas zone that WPX is exploring, a “wet” or liquid gas region, and an oil zone.

    Until recently, those Mancos layers eluded producers because of the high cost of drilling into hard shale rock, and the difficulty of accurately pinpointing hard-to-reach pockets of hydrocarbons.

    But modern drilling techniques are helping to crack the Mancos open. That includes three-dimensional imaging to pinpoint “sweet spots” for oil and gas before drilling begins, hydraulic fracturing — or fracking — whereby operators pump water and sand at high pressure into wells to bust up tough shale rock, and horizontal drilling to penetrate sideways into the shale to reach trapped oil and gas.

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