ALBUQUERQUE, N.M. — La Plata County, Colo., commissioners on Tuesday unanimously approved a memorandum of understanding with a Texas energy company that plans to drill two exploratory shale-oil wells in the southwestern part of this southwest Colorado county, The Durango Herald reported.
Swift Energy Operating LLC will now go to the Colorado Oil and Gas Conservation Commission with applications for two exploratory drilling and spacing units, The Herald said.
Their target is the Mancos Shale, a shale play that stretches across northwestern New Mexico into southwestern Colorado that is thought to be rich in oil and natural gas, the paper reported.
The memorandum puts several requirements on Swift’s drilling operations, including emissions controls, water-sampling standards and well-pad sharing mandates going beyond what is required by the state, according to The Herald.
If Swift’s applications are approved by the state, the company said it hopes to apply for a drilling permit in April and move a rig into the area by this summer, The Herald said.
The Mancos Shale was at the center of a two-day conference this week that drew about 500 people from around the nation to Farmington, and most of the drilling into the shale so far has taken place in the southern part of the San Juan Basin, the paper reported.
Prospects for oil in the northern part of the basin are unknown, said Bob Redweik, Swift’s corporate manager of health, safety and environment.
3/18/13 — N.M. shale may hold next boom
By Kevin Robinson-Avila/Journal Staff Writer
FARMINGTON – Oil and gas industry representatives say the next big oil boom in the U.S. may take place in northwestern New Mexico.
Executives from some of the biggest companies are here for a two-day conference with academics and public officials at San Juan College to discuss the potential for a previously untapped section of the San Juan Basin known as the Mancos shale.
“There’s still a lot of oil and gas to produce and develop here,” BP America Vice President Darryl Willis told about 500 conference participants on Monday. “The Mancos shale could be a really, really good shale play.”
In an opening speech, former U.S. Sen. Pete Domenici said about 1.8 billion barrels of oil could be recovered from New Mexico reservoirs in the Mancos shale, which also extends into Colorado, Utah and Wyoming.
“It’s a stunning amount,” Domenici said. “We have the technology to make a run to recover a huge part of it. Hydraulic fracturing and horizontal drilling have unlocked a tremendous amount of resources.”
Those are the same techniques that helped open huge shale-gas plays in the Northeast, Midwest and South in recent years.
The successful extraction of oil and wet natural gas in the basin would bring relief to San Juan County, which remains mired in recession because of extremely low prices for the dry natural gas that has characterized most production in the area. High oil prices and the premiums paid for natural-gas liquids, such as propane and butane, can offset the higher costs of fracking and horizontal drilling needed to exploit the Mancos.
But to accomplish that, the wells must be able to produce substantial commercial quantities. That’s something companies are now evaluating, because the shale rock reservoirs in the Mancos differ substantially from shale basins in other places, said Nick Sommer, a geologist with Canada’s Encana Corp., which is operating exploratory wells in the Mancos.
“The jury is still out on how much of the hydrocarbons trapped in the Mancos can actually be recovered,” Sommer said.
“It depends on the nature of the reservoir, how available technology is applied and the advances of technology in the future,” said Ron Broadhead, a geologist with the New Mexico Institute of Mining and Technology in Socorro.
— This article appeared on page B1 of the Albuquerque Journal