A highly productive natural gas well tested in the San Juan Basin shows the potential of the Mancos Shale to become a significant new source of the commodity in the U.S., BP announced Monday.
The well test started in June about seven miles south of the Colorado state line and had the highest production rate seen in the San Juan Basin in the past 14 years, a news release said. The well achieved an average 30-day initial production rate of 12.9 million cubic feet per day.
"This result supports our strategic view that significant resource potential exists in the San Juan Basin, and gives us confidence to pursue additional development of the Mancos Shale, which we believe could become one of the leading shale plays in the U.S.," Dave Lawler, CEO of BP's U.S. Lower 48 onshore business, wrote in a statement.
In recent years, experts touted the Mancos Shale formation in the San Juan Basin as a major source natural gas.
"It has the potential to revitalize the San Juan Basin, on both sides of the state line," said Christie Zeller, executive director of the La Plata County Energy Council.
Better technology is making it possible to access the gas and oil reservoirs in the formation, which is 80 million to 95 million years old.
The San Juan Basin is shaped like a bowl with about one third of it on the Colorado side of the border and rest in New Mexico.
The natural gas could be accessed in Colorado and New Mexico, but the oil is in the southern part of the basin, she said.
Wells into the Mancos Shale must be much deeper than the traditional coalbed methane wells, she said.
The test well extended 10,000 feet horizontally and utilized advanced completion techniques, BP spokesman Brett Clanton said in an email. He declined to elaborate on the techniques used.
The 10,000-foot lateral is about three times the length of a coalbed methane well, Zeller said.
Despite the promising test, BP still plans to close its office in Farmington by the end of the year and lay off 40 people.
However, the company is planning to open a satellite office near Aztec, and other employees will be relocated to Durango, he said.
Employees at the new office and an office near Navajo Dam will serve the southern San Juan Basin.
When asked whether the promising test could lead to new jobs, Clanton said it would depend on the level of investment BP and other companies are able to economically justify.
BP is also evaluating whether to drill into the Mancos Shale on the Colorado side of the border, Clanton said.
The successful well test took place on assets BP bought from Devon Energy in late 2015.
BP bought 580 wells on 33,000 acres in San Juan and Rio Arriba counties in New Mexico from Devon..