San Juan oil drilling heats up in N.M.

An Encana Corp. rig explores for oil south of Farmington. The company has drilled about 30 wells in the area.

(SW.EF! editor’s note: read this mainstream media article with a critical lens, it contains some pro-fracking propaganda.)

Swift and Huntington explore in Colorado

By Chuck Slothower, The Durango Herald

Encana Corp. plans to pour $250 million to $450 million into drilling oil wells on New Mexico’s side of the San Juan Basin next year, the company says.

The Canadian company has aggressively pursued San Juan Basin oil, drilling about 30 wells to date. The drilling is concentrated near Huerfano, N.M., southeast of Farmington.

“Our strategy really is to shift our portfolio more towards oil, so we’re really focusing on areas where we can do that, and the San Juan’s one of those,” said Doug Hock, a Denver-based spokesman for the company.

Encana plans to operate two to four drilling rigs in the area in 2014, according to a company presentation. The wells cost $4 million to $5 million each and have shown initial production rates of 400 to 500 barrels per day.

The San Juan historically has been one of the nation’s most productive natural-gas basins, but with prices low for that commodity and high for oil, drillers are finding oil in some previously overlooked areas.

Improved techniques for horizontal drilling and hydraulic fracturing, or “fracking,” have made such drilling possible.

WPX Energy optimistic about continued oil development in the Gallup Sandstone

Aztec Well Services drilling rig 980 is working for WPX Energy to drill horizontal oil wells into the Gallup Sandstone. (Courtesy of Jim Blecha)

By Leigh Black Irvin, The Daily Times

FARMINGTON, NM — WPX Energy has announced that it has initiated oil development in New Mexico’s San Juan Basin after exploratory drilling this spring yielded commercially viable results from the Gallup Sandstone in the Mancos Shale formation.

The wells are located on U.S. Bureau of Land Management and state of New Mexico land near the Lybrook area, which is about 100 miles southeast of Farmington.

WPX has about 159,000 acres under lease in the San Juan Basin, including 31,000 acres in the Gallup Sandstone development.

Staff at WPX’s Aztec office are overseeing operations of the discovery.

The first four Gallup Sandstone wells the company drilled flowed at a maximum rate of 488, 623, 1,004 and 800 barrels of oil per day.

WPX now has six producing wells in the Gallup Sandstone, and the company is in the process of drilling a ninth well. The wells are about 5,000 feet in vertical depth with horizontal laterals averaging about 4,000 to 5,000 feet, according to Susan Alvillar, WPX’s community affairs representative.

“WPX Energy has operated in the San Juan Basin for over 30 years. To date, we have drilled gas wells, but the nine wells in the Gallup Sandstone are oil wells,” Alvillar said. “Our goal is to have eight to 10 additional wells by the end of the year, producing 3,400 barrels of oil equivalent per day.”

The Gallup Sandstone is a sandy interval embedded in the Mancos Shale geologic formation. It is about 90 million years old.