Next big oil boom could come in northwestern NM

March 18, 2013 • State News

ALBUQUERQUE, N.M. (AP) — Executives from some of the nation’s biggest oil and gas companies said Monday that the next big oil boom could take place in northwestern New Mexico.

The executives are in Farmington for a two-day conference 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. “The Mancos shale could be a really, really good shale [auth] play.”

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.

“We have the technology to make a run to recover a huge part of it,” Domenici said. “Hydraulic fracturing and horizontal drilling have unlocked a tremendous amount of resources.”

Hydraulic fracturing is a technique to extract oil and gas from rock by injecting mixtures of water, sand or gravel and chemicals under high pressure.

Hydraulic fracturing and horizontal drilling are the same techniques that helped open huge shale-gas plays in the Northeast, Midwest and South in recent years, according to the Albuquerque Journal ( )

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 hydraulic fracturing and horizontal drilling needed to exploit the Mancos.

To do that, however, the wells must be able to produce substantial commercial quantities.

The oil and gas companies now are evaluating that 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.

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