Mancos may have higher gas estimate

RIFLE — The U.S. Geological Survey could revisit its local Mancos shale gas estimate based on industry drilling results in coming years, according to a geologist for the agency who says such estimates tend to be conservative.

A reassessment could lead to an even further upward revision, after the agency earlier this year said the Mancos in the Piceance Basin contains 66 trillion cubic feet of undiscovered, technically recoverable natural gas. That’s the second-highest shale-gas estimate by the agency, behind an 84-tcf estimate for the Marcellus shale in the eastern United States.

It’s also about 40 times higher than a previous USGS estimate of the local Mancos resource issued in 2003.

The 66 tcf is the best guess by the USGS of the likely recoverable gas resource, which it says likely ranges somewhere between about 34 tcf and 112 tcf.

Sarah Hawkins, lead geologist for the Mancos project, detailed how the USGS came up with its estimate in a presentation to the Northwest Colorado Oil and Gas Forum on Thursday.

David Ludlam, executive director of the West Slope Colorado Oil and Gas Association, congratulated Hawkins for the work done by the USGS.

“We’ve received calls from all over the world as a result of it,” he said.

But he added that his association’s member companies think that even 100 tcf could be a low estimate for the Mancos, if evolving technologies and improving recovery rates from wells are taken into account.

“Our assessments are only as good as the data that we have access to,” Hawkins responded.

While companies sometimes share information with the agency, it generally works with more limited data than the industry has, “and I think that’s probably why our numbers tend to be conservative” for its assessments, she said.

She said if companies drilling future wells into the Mancos show consistently high well production, the USGS would likely revisit its current estimate for the formation. It has done two reassessments in just five years for the Bakken shale, which became the focus of a considerable amount of oil drilling in and around North Dakota in recent years.

The agency’s Mancos report quickly has become an integral part of the debate over local oil and gas development. The industry cited the Mancos gas development potential at stake after the Bureau of Land Management proposed canceling 25 leases in the Thompson Divide area southwest of Glenwood Springs.

Now that the BLM has proceeded with canceling the leases, the USGS estimate could become an issue in litigation that’s expected to follow.

SG Interests, which owns 18 of the canceled leases, has indicated it’s likely to claim it wasn’t adequately reimbursed for the leases because of a failure of the BLM to account for things including their resource development potential.

Hawkins previously has said the agency’s assessment was more regional in scale, and can’t be used to estimate with much certainty how much Mancos gas underlies the Thompson Divide portion of the Piceance.

But SG points to a highly productive Mancos well it drilled just outside of the Thompson Divide area, similar to gas-rich Mancos wells drilled in other parts of the Piceance.

Meanwhile, conservationists have countered that the high gas potential in the Mancos, coupled with the huge gas resource already being tapped by numerous wells in shallower sandstone formations in the Piceance, show that industry still has an abundance of drilling opportunities even if some local areas are protected from drilling.


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