New Mexico Oil & Gas Production This slide set accompanied a presentation given to the House Energy and Natural Resources Committee (Rep. Brian Egolf,

New Mexico Oil & Gas Production

This slide set accompanied a presentation given to the House Energy and Natural Resources Committee (Rep. Brian Egolf, Chairman) of the New Mexico State Legislature on February 3, 2012 by Ron Broadhead, Principal Senior Petroleum Geologist at the New Mexico Bureau of Geology and Mineral Resources(a Division of New Mexico Tech).

The slide set is identical to that given to the Legislative Committee except that slides have been given brief figurecaptions to place them in the context of the presentationand slide source material has been cited and referenced.

By Ron BroadheadNew Mexico Bureau of Geology and Mineral Resourcesa Division of New Mexico TechSocorro, NM 87801

New Mexico Oil & Gas Production

New Mexico has obtained oil and natural gas production from 3 basins: the Permian Basin,the San Juan Basin, and the Raton Basin.the Tucumcari Basin is an emerging frontierbasin in which discoveries of natural gas have been made in the last few years.

Approximately 2/3 of natural gas production has been obtained from conventional and tightsandstone reservoirs in the San Juan Basin (green) and the Permian Basin (red). The reservoirs in the gas wells that provide this production have almost all been fracked in order to yield economic levels of production. Natural gas obtained from coal beds in the San Juan Basin accounts for about 1/3 of state gas production and is in current decline. Natural gas has been produced from coal beds in the Raton Basin for the last 10 years and accounts for about 2% of state production. Graph from Broadhead and Price (2012).

New Mexico oil production reached its peak in the late 1960’s and early 1970’s andhas since been in decline. The noticeable increase in production over the last 2 yearsIs due to drilling and completion of horizontal wells with the new multistage fracking techniques in low permeability formations of the Permian Basin.

San Juan Basin

As this cross section shows, strata in the San Juan Basin dip gently down into the basin from the southand more steeply from the north. Natural gas and oil production has been traditionally obtained fromthe strata shown in blue, which are mostly tight gas sands (except for the coals of the Fruitland Formation).Minor shale gas has been produced from the Lewis Shale from vertical wells that have been productive fromdeeper, conventional reservoir – these do not represent a full test of Lewis shale gas potential as horizontal wells with multistage fracks are needed for that. The deeper Mancos Shale, having been buried deeper and thus more thermally mature may be a more attractive shale gas target, as well as a target for unconventional Oil in some areas. Cross section modified from Stone and others (1983) to indicate strata productive of natural gas and oil.

San Juan Basin

Basin flankoil potential

Deep basingas potential

On the basin flanks the Mancos Shaleis within the oil window and is currently a target for unconventionaloil exploration. The Lewis Shale is thermally immature and within thebiogenic gas window in these areas.

Within the deepest parts of the San Juan Basin as reflected by the thermal maturation profile of this well, the Mancos Shale has been thoroughly “cooked” within the basin’s “hydrocarbon kitchen” and iswithin the thermogenic gas window –shale gas potential is optimal. It isonly within the deepest parts of the basin where the Lewis Shale is within the gaswindow.

Permian Basin

Brown = strata withmost shale gas potential

Green = strata with mostongoing unconventionaloil drilling

The Permian Basin contains several attractivetargets for shale gas, including the DevonianWoodford Shale, the Mississippian Barnett Shale, and the Permian Wolfcamp shale. Low permeabilitysiltstone reservoirs in the Bone Spring Formationare currently active targets for unconventional oil by drillinghorizontal wells stimulated with multistage frack jobs and significant oil production has resulted. Other low-permeability reservoirs that have added significant oil production through application of horizontal drilling and multi-stage frack jobs in the past 2 to 3 years include the Yeso and Abo Formations on the Northwest Shelf and the Brushy Canyon sandstones in the deep Delaware Basin.

Barnett ShalePermian Basin

Depth to Barnett Shale

Barnett gasexploration fairway

The Barnett Shale is an example ofa target for shale gas in the deep basinwhere in places it is present at depths exceeding 15,000 ft. Geological characterizationhelps define a northwest-trending shale gasexploration fairway. Outside of this fairwaypotential may include unconventional oil.Maps from Broadhead and Gillard (2007)and Broadhead (2009).

Bone Spring FormationPermian Basin

The Avalon shale of the Bone Spring Formation contains substantial resources of unconventional oil. In the last two years, it has seen extensive exploration and drilling activity – oil can be produced from this reservoir through the application of horizontal drilling and multi-stage fracking. Before development of these new technologies10 years ago, the unconventional oil resource in the Bone Spring could not have been produced and Bone Spring production was limited to a relatively few smaller conventional reservoirs (shown in gray).

Raton Basin

Since 2000 the New Mexico part of the Raton Basin has been productive of natural gas reservoiredin shallow ( < 2700 ft deep) coal beds of the Raton and Vermejo Formations. In the 1970’s, a single wellproduced shale gas from the Pierre and Niobrara Shales and supplied the gas needs of Vermejo Ranch. Recently 4 vertical wells have been drilled to evaluate shale gas potential of the Pierre and Niobrara Shales and have produced small volumes of gas. Because these wells wee drilled vertically and not horizontally through the shales, they may not represent a full evaluation of shale gas potential at the places they have been drilled. Map modified from Broadhead (2008).

Raton Basin

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Tucumcari Basin – an emerging gas basin

The Tucumcari Basin of east-central New Mexicois an emerging gas basin following recent discoveries ofnatural gas. Gas liquids as well as oil might also be present in parts of the basin.

Reservoirs are Pennsylvanian (Strawn andCanyon) sandstones interbedded with organic-rich shales in in deeply buriedelevator basins. In these basins, the shales havebeen cooked and have generated gas. Reservoirs are sandstones of limited permeability that will need to be fracked. Horizontal drilling combined with fracking may be required foroptimal recovery in some places. Cross sectionand map from Broadhead (2001).

References cited for figures in slide set

Broadhead, R.F., 2001, New Mexico elevator basins -1: Petroleum systems studied in southern Ancestral Rocky Mountains: Oil and Gas Journal, v. 99, no. 2, p. 32-38.

Broadhead, R.F., and Gillard, L., 2007, The Barnett Shale in southeastern New Mexico: Distribution, thickness, and source rock characterization: New Mexico Bureau of Geology and Mineral Resources, Open-file report 502, 56 p. plus plates.

Broadhead, R.F., 2008, The natural gas potential of north-central New Mexico: Colfax, Mora and Taos Counties: New Mexico Bureau of Geology and Mineral Resources, Open-file report 510, 145 p. plus plates.

Broadhead, R.F., 2009, Mississippian strata of southeastern New Mexico: Distribution, structure, and hydrocarbon plays: New Mexico Geology, v. 31, no. 3, p. 65-76.

Broadhead, R.F., 2010, Oil and natural gas potential of the pre-Cretaceous section, Raton Basin, New Mexico: American Association of Petroleum Geologists, Search and Discovery, Article No. 10260, 24 p.

Broadhead, R.F., and Price, L.G., 2012, New Mexico’s natural gas resources: New Mexico Bureau of Geology and Mineral Resources, Earth Matters, Winter 2012.

Stone, W.J., Lyford, F.P., Frenzel, P.F., Mizell, N.H., and Padgett, E.T., 1983, Hydrogeology and water resources of San Juan Basin, New Mexico: New Mexico Bureau of Mines and Mineral Resources, Hydrologic Report 6, 70 p. plus plates.