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Mancos Shale May Hold Potential for Oil Boom

FARMINGTON — The San Juan Basin could see an uptick in Mancos Shale drilling as soon as 2012, an oil and gas industry official said this week.

“We think we’ll see a critical mass by next year,” said Steve Dunn, drilling and production manager at Merrion Oil and Gas. “We’ll see some drilling.”

Dunn was touting the potential for an oil boom in the Mancos Shale, a geologic layer deposited about 100 million years ago in the San Juan Basin. His remarks came at Wednesday’s San Juan Economic Development Service meeting.

Horizontal drilling and hydraulic fracturing have made it possible for drillers to reach previously unavailable oil and gas deposits deep within shale rock. Plays, as the booms are called, have overtaken the Bakken Shale in North Dakota, the Barnett Shale in Texas and elsewhere.

“We believe the Mancos is going to be the next big play,” he said.

Drilling in the Mancos Shale would require 10 to 20 stages of fracturing per well, Dunn said. Once drillers gain experience, the wells could be completed for about $5 million each.

“It takes a lot of money to do it, but there’s the potential to make a lot of money if you’re successful,” Dunn said.

The oil-rich area of the Mancos Shale is mostly south of Farmington, spanning 3,400 square miles in San Juan, Rio Arriba and Sandoval counties, he said.

Drillers increasingly are focusing on oil as natural gas prices stagnate. Oil, however, hasn’t been immune from economic worries. Investors had driven down the price of oil earlier this week, but it rose on Thursday to $85.72 on the New York Mercantile Exchange.