Monday, June 20, 2011

Another Bakken -- Does This Sound Familiar?


From a contributor at SeekingAlpha:


April 13, 2017: COP to sell its assets in San Juan Basin; $3 billion; to Hilcorp Energy. 

December 21, 2015: BP buys Devon's assets in the San Juan Basin

October 31, 2013: a reader sent me this update --
From EnCana in their recent announcements:  In the San Juan Basin , the most recent four wells had initial production rates between 400 bbls/d and 500 bbls/d of oil over the first 30 days. Well costs continue to decrease and the newer wells have been drilled twice as fast as the original wells, some with total well costs under $4.0 million per well. Encana drilled nine wells in the San Juan Basin during the third quarter and currently has 23 wells on production in the play.
April 22, 2013: Encana reports nice productivity.
Encana Corp. on Tuesday announced positive results from its San Juan Basin oil exploration, saying the effort had "reached commerciality" with production expected to exceed 1,700 barrels of oil equivalent per day.
The Canadian company, which has been the most aggressive firm in testing the potential of San Juan Basin oil, said it may add a rig by year's end to the two now operating in the basin.
Original Post
Link here.
The geologists estimated the Mancos Shale holds 59 billion barrels of oil, of which perhaps 3 billion is recoverable -- 10 times more than the [San Juan] basin has produced in the past 90 years.

"That would make this a big, big prize, and that's why these companies are coming in," Dunn said. "If they see success, there will be a boom overnight, assuming the price of oil holds."
San Juan Basin, New Mexico.
The Mancos Shale stretches across the San Juan Basin from Durango, Colo., at its northern extreme nearly to Gallup southward, and from Shiprock to the Chromo, Colo., area.

At 3,600 square miles, the basin is the largest natural gas-producing region in the Rockies.

Natural gas dominates the basin to the north, while oil is thought to be more prevalent in the south. Oil and gas officials say the Mancos Shale is geologically similar to the Niobrara Shale in Northeast Colorado, where production has boomed.
The article mentions the Bakken in passing. story here.
Since the San Juan Basin first boomed after World War II, natural gas has formed the backbone of the local energy industry.

Reliable natural gas production brought jobs, pumped tax revenues into government coffers and, in many ways, built Farmington. Oil production, meanwhile, was at best an afterthought.

That may be about to change. New technology, coupled with high oil prices, is spurring renewed interest in oil buried deep within San Juan Basin shales.

"We've always known that there's hydrocarbons in the shales. We haven't been able to get it out in economic quantities," said Steve Dunn, drilling and production manager at Merrion Oil & Gas in Farmington. "That's changing."

Though it's far from certain, oil and gas industry insiders say there's also a realistic possibility that San Juan County could be on the verge of an oil boom.

Several major producers are exploring the potential for drilling San Juan Basin oil, industry officials said. Companies recently have approached local independent oil and gas firms to discuss buying rights in the Mancos Shale, the oil-rich geologic layer of the basin.

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