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Oil-Rich San Juan Shales Evaluated

FARMINGTON – Since the San Juan Basin first boomed after World War II, natural gas has formed the backbone of the local energy industry. Oil production was at best an afterthought.

But 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.”

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.

One major North American company in discussions with Merrion Oil & Gas flew geologists to Farmington to evaluate the basin, said Dunn.

The geologists estimated the Mancos Shale holds 59 billion barrels of oil, of which perhaps 3 billion is recoverable – 10 times more than the basin produced in the past 90 years.

“That’s why these companies are coming in,” Dunn said.

Elliott Riggs, a Farmington-based independent petroleum geologist, sees potential for significant oil production in the Mancos Shale. “Every 10 years, something happens here unanticipated and unexpected in the basin that changes the economics of the basin. The last big change was coal-bed methane 10 or 15 years ago. I predict the Mancos will be the next big change.”

— This article appeared on page B4 of the Albuquerque Journal