Oilandgasdiscouery wellsdrilled in NewMexico in lggg byRonald F.Broadhead, NewMexico Bureau of Mines andMineral Resources, socono,NMg7g01 i"L* aa $ari Juan Cui{ax Raton Easin *-a 3 hdc Ispano!a Basin I l "_ A 5an lJiiguel -16 17v I Cihsla i* .* *,*- Eaca Basin 15x Y Introduction More wells were drilled for oil and gas in New Mexico in 1988than in 1982.Da[a obtained from the New Mexico Oil Conservat i o n D i v i s i o n i n d i c a t e 1 , 0 4 3w e l l s w e r e completedin 1988,up 11%from the 938wells completed in 1987but down 64Vofrom the record2,867wells completedin 1981.In the Permian Basin, southeastNew Mexico, 238 wells were completed in 1988,down from 740completionsin 1987;435wells were completed as oil producers,139wells were completed as gas producers,and 164wells were plugged and abandoned,resulting in a success rate of 78Vo.In the San fuan Basin, northwest New Mexico,305wells were comRlgted in 1988,up from 198completionsin 1987;74 wells were oil producers,176wells were gas producers,and 55 wells were plugged and abandoned,resulting in a successrateof 82Vo.Inaddition,two wellswere completedin the Bravodome carbondioxide gas field of southern Union and eastern Harding Counties. Total footage of hole drilled in 1988was 5,3M,474ft, up from 4,767,394ftin 1987.The averagedepth of wells drilled in 1988was 5,724 ft, 41 ft more than the averagedepth drilled in 7987. Alsoin thisissue Jv O # O 50 50 lOO mi 1OO |5O km ^. H D t g n l l r c a ngt a s d i s c o v e r y I Significano t il discovery $ S i g n i fi c a n td r y h o l e w i r h o i l a n d g a s s h o w A wagon Mound gas pool Q S i g n i f i c a n td r y h o l e w i t h o i l s h o w $ ' Significant dry hole without reported snow I B Newkirk oil pool g f C S a n t a R o s at a r s a n d s I Significant wildcat well drilling, not completed,"tight", or plannedat end of 19 8 8 FIC,URFl-Significantoil and gas discoveriesand wildcat wells drilled in New Mexico in 19gg.Major geologic featuresare taken from Broadheadand King (1998).Cather and Johnson (19g4),Kelley (19y'g), Kottlowski an^dstewart (t920), Meyer (1966),Moleniai pizy Thompson andyacia iryoodl 4rsar1, ward et al. (1978). ".,i Statetaxeson natural resourceproduction Subscription information RfSr valuesin MogollonDatilvolcanicfield Dept.ofEarthSciencesat NMSU Service/News NMGS News Index to Volumell Staff notes p.75 p. 75 p. 76 p. 84 p. 85 o. 86 p.87 p. 88 Goming soon Reviewof Mesozoicnomenclature EagleNest-GraniteHill arearocks FentonHillgranodiorite parenthesesthat refersto its locationin FigThe downturn in drilling over the past ure 1 and its descriptionin Tables1,2, ot 3. seven years has been accompanied by seriefforts. Several exploratory decreased ously major oil companies announced reduction or Southeast New Mexico elimination of onshore exploration efforts in Drilling activity remained slow in 1988 in the United States. Despite this, however, sigthe three geologic subdivisions of the Pernificant exploratory drilling continued in the mian Basin: the Delaware Basin, the Central Baca, Estancia, and Tucumcari Basins and in Basin platform, and the Northwest shelf. the Gallup-Zuni sag west of the Zuni uplift Drilling activity was also light on the Roose(Fig. 1). Locations were staked at the end of velt uplift. Despite the slow drilling activity, 1988 for frontier wildcat wells to be drilled however, the Permian Basin yielded several in eastern Socorro County, north-central Otero significant oil and gas discoveries in 1988 (Fig' County, Taos County, westem Cibola County, 1; Table 1). McKamey (1988)presented stratiand northeast Rio Arriba County. For purposes of this report, a significant graphic charts of oil- and gas-producing rock units in southeastern New Mexico, as well wildcat discoaeryis defined as a well in which as geologic summaries of recently discovered commercial amounts of oil or gas were discovered in a stratigraphic unit more than 5 oii and gas pools. The Delaware Basin, the deep marine part miles from the limits of previously discovof the Permian Basin, yielded four significant ered pools with commercial production from that stratigraphic unit. A significant wildcat discoveries in 1988. Gas was found in Cisco strata (Pennsylvanian) in the BTA Oil Prodru hole is defined as a drv hole that was ducers No. 1 8710 jV-P Tank B (L). Gas was dritted in a not-yet-productive basin or a part of a basin and in which petroleum reservoirs found in Wolfcamp strata (Permian) in the Enron Oil & Gas No. 1 Harkey State 35 (2). were evaluated. The locations of significant wildcat wells that were completed in 1988 The Wolfcamp also yielded a significant oil discovery in the Enron Oil & Gas No. 1 Queen are shown in Figure 1. Table 1 summarizes the significant wildcat discoveries and Table Lake Federal 20 (3). Oil was discovered in basinal Brushy Canyon sandstones of the 2 summarizes the significant wildcat dry Delaware Mountain Group (Permian) in the holes. Table 3 lists other significant wildcat wells that were being drilled, were not com- Pogo Producing No. 1 Neff Federal 13 ( ). Because of the relatively slack gas market, pleted, or were held "tight" at the end of exploration in the Delaware Basin was con1988. centrated primarily on finding new oil reEach well is designated by a number in wildcat discoveries in New Mexico in 1988; the term formation is used in an TABLE l-significant informal re.rse. BOPD, bbls oil per day; BWPD, bbls water per day; MCFGPD, thousand fti gas per day; IB initial potential; IPD initial potential, flowing; IPB initial potential, pumping; IPCAOB initial potential, calculated absolute open flow; NR, not released; owwo, old well worked over. Number Fi8. 1 Ltration (FctioF townshiprrn8e, county) 34-23S 24E, Eddy Completion drt€ (mo/yr) Op€r.tor, w:ll iusbe., ed lea* BTA Oil Producers No. I 8710 fV-P Tank B Total d€pth (ft) at total depth PrcducinS formation ProducinB inteilal (f0 tnitial pot€ntial Cisco 8,036 8,120 IPF 724 9,975 Barnett MCFGPD (Mississippian) (Pennsyl.ranian) 12,920 Morrow (Pennsylvanian) Wolfcamp (Permian) 10,36410,380IP416 MCFCPD 20 249 29E, Eddy Enron Oil & Cas No. 1 Queen Lake Federal 20 12,390 Atoka (Pennsylvanian) Wolfcamp (Permian) 9,884 10,034 IPF 47 BOPD +67 MCFCPD + 171BWPD 13-229 37E, Eddy Pogo Producing No. 1 Neff Federal l3 14,975 Morrow (Pennsylvanian) Delaware (l'ermian) 7,119-7,158 IPF 232 BOPD + 160 MCFCPD + 131BWPD 9 145-298, Chaves Santa Fe Exploration No. l Holmstrom Federal 9,758 Devonian Devonian 9,728 9,7s8 rPF,n3 BOPD + 14 MCFCPD 29-79-31E, Chaves Robert N. Enfield No. 1 McCombs E 9,182 Precambrian Devonian 8,4Z/ 8,551 TPCAOF 1,802 MCFGPD Dugan Production Corp.No.1 Ollie 2,200 ticlureJ Cliffs (Cretaceous) Fruitldnd PicturedCliffs (Cretaceous) 2,0842.,U)1; IPP 35 MCFCPD + 2,0912,$6 25 BWPD Meridian Oil lnc. No. I Luthy (owwo) 2,207 Pictured Cliffs (Cretaceous) fruitlan. (Cretaceous) 1-26N-8W, San Juan November 1989 New AAexnc@ GEOLOGV . Science andService volume 11, No.4, November 1989 Editor: Carcl A. Hjellming Published quarterly bY New Mexico Bureau of Mines and Mineral Resources a division of New Mqi@ Institute of Mining & lbchnology 35 245 27F,, Enron Oil & Eddy Cas No. 1 Harkey State 35 30-24N-ZW, Rio Arriba Oil gravity (degre6 API) serves;lesseffort was concentratedon finding new gas reserves. Major targets for oil exof the Bone plorationwere basinalsandstones Spring Formation and Delaware Mountain Crouf (Permian) and Wolfcamp carbonate reservoirs(Permian).Exploration for gaswas c o n c e n t r a t e dm o s t l y i n C i s c o , C a n y o n , Strawn, Atokan, and Morrowan reservoirs (Pennsylvanian). There was limited exploft) ration ior oil in the deep (10,000-13,000 Silurian and Devonian carbonatereservoirs. Development drilling in the Delaware Basin was mostly for oil in 1988.Major targets for development drilling were oil reservoirs in the shallow (4,000-6,000ft) Delaware Mountain Group (Permian)and moderately deep (6,000-10,000ft) Bone Spring Formation (Permian).Developmentdrilling for gas ft) Atokan was mostly in deep(10,000-14,000 and Morrowan (Lower Pennsylvanian)clastic units. No significant wildcat discoverieswere made on the Central Basinplatform in 1988. E x p l o r a t i o n w a s c o n c e n t r a t e do n d e e p ft) Silurianand Devoniantar(10,000-12,000 getsunder the platformand alongthe west6rn border areas of the platform. Several exploratorywells were drilled for this purposeand severalold abandonedwells were ie-entered with attempts to recomplete for Silurian and Devonian discoveries.Development drilling was mostly for oil in the shallow (2,000:5,000ft) Queen and Crayburg sandstones(Permian)and San Andres Nao Mexico Ceology 1,964 2,1.05 NR. Cas well. 46.6 36.5 BOARD OF REGENTS Ex Ofticio Carrey Canuthers, Couernorol Nru Mextco Alan Morgan, Suryrintendefltof Publiclnstruction APPointed Lenton Malry Pres.,1985-7991,Albu4uerqw Robert O. Andemon, Sr.lTreas.,1 7-1993, Roswll Lt. Cen. Leo Marqtez, 1989-1995,Alhuqueryue Carof A- Rymer, M.D. 1989 1995,Albuquerque Steve Torres, 1967-1991,Albuquerque New Mexico Institute of Mining & Technology .... LaurenceH.lattman Pfesidilt.. Nw Mexico Bureau of Mines & Mineral Resources Diector and StflteGeologist . . . . Frank E. Kottlowski Astuciate Director James M. Robertson Sub$riptions:lssued quarterly, February. May, August, November; subrription price $6.00/calendaryear. EditorialMttq: Articles submitted for publication should be in the editor's hands a minimum of five (5) months before date of publication (February, Mat August, or November) and should be no longer than 20 typewritten, double-spacedpages.All scientific PaPerswill be reviewed by at leasttwo PeoPlein the aPProPriatefield of study. Addressinquiries to CarolA. Hjellining, Editor ol Nru Mexia Geology,New Mexico Bureau of Mines & Mineral Resources,Smorrc, NM 87801 Publishedas public doruin, thzr4orc reprcducible@ithoutPq mission.Sourcecreditreqwted. Circulation:1,6fr Prirter: University of New Mexico Printing Plant carbonates(Permian). Sirgo-Collier, Inc. continued extensive development of a waterflood unit in the Dollarhide Queen oil pool of southeastLea County. Chevron continued its infill drilling program of the EuniceMonument Grayburg-SanAndres oil pool of east-centralLea Counfy. Other targetsof development drilling on the Central Basin platform were oil reservoirs in the Blinebry, Tubb, and Drinkard zones of the Yeso Formation (Permian). Two significant wildcat discoveries were made on the Northwest shelf in 1988. Oil was found in Devonian reservoirs in the Santa Fe Exploration No. L Holmstrom Federal(5). Gas was found in Devonian reservoirsin the Robert N. Enfield No. 1 McCombs E (6) in east-centralChaves County. In contrastwith other parts of the Permian Basin, development drilling of oil and gas pools on the Northwest shelf continuedat a relatively brisk pace during 1988.Major tarBetswere oil reservoirsin the shallow (2,0fi)6,0N ft) Grayburg and San Andres Formations (Permian).Conoco and Phillips continued extensive infill drilling programs in the Maljamar Grayburg-San Andres oil pool of northwest Lea County. Conocobeganits second carbon dioxide flood in the Mallamar pool early in 1989.Phillips continued its extensive infill drilling program in the Vacuum Grayburg-San Andres oil pool of northwestem Lea County. There was limited development of deepei oil reservoirs:Wolfcamp (Permian) carbonates,Pennsylvanian carbonates, and Ordovician carbonates. The only gas pools extensively developed on the Northwest shelf in 1988were the Pecos SlopeAbo and West PecosSlopeAbo gas pools of northwest and north-central Chaves County. More than 50 infill wells and extension wells were drilled in those pools, which produce from "tight" fine-grained red beds of the Abo Formation at depths of 3,5005,000 ft. Production from most of the 6fi) wells in the Ato gaspools was shut in during early fune when it was discoyeredthat trace amounts of arsenic were present in the Abo gas. Wells which connected to Enron Corporation's Transwestem pipeline were shut in; most Abo gas is transported to customers in California through this pipeline. Arsenic concentrations were estimated to be 500 micrograms/m'for gas delivered to the Transwestern pipeline and 0.05 ppb for gas delivered to the El PasoNatural Gas pipeline that servesthe area (Slaton, 1988).Nine gastreatment units were installed in the Pecos Slope Abo pools. Those treatment units remove the arsenicfrom the gasbefore it enters the main pipeline (Slaton, 1989). Abo gas production resumed in December,1988. The Rooseveltuplift and adjacentareaswere drilled sparsely in 1988.No significant wildcat discoveries were made. Development drilling was concentratedon oil reservbirsin the southern part of RooseveltCounty; primary targets were in the Todd San Andres oil pool and the North Bluitt SilurianDevonian oil pool. Development of Ordovician and Pennsylvanian reservoirs in the TABLE 2-Significant wildcat dry holes drilled in New Mexico in 1988;the term formation is used in the informal sense.D&A, dry and abandoned;perf, perforated; acid, acidized; owdd, old well drilled deeper; OTD, old total depth; TD, total depth. Number on Fig. r Location (sdioFtownship nnge, county) l1 t3 lo i f I Operator, well number, and l€as l6-14N-328, Harding Michael K. Galvis No. 1 StateHGH l6-13N-34E. Quay 31-13N-308, San Miguel Completion dat€ (month./ yeatt 718€ Total depth (ft) Fomtion at total depth Status Comments 1,098 San Andres (Pemian) D&A Lost circulation in San Andres Formation (Permian). Esperana Energy No. I Logan State 3,600 Prcambrian D&A Perf & acid 3,2201,3n It & 3,190-3,200ft (granite) with no show. Perf & acid 3,112-3,120ft (Abo) with no show. Perf 2,5982,622ft (Tubb) with no show. Tom L. lntram No. 1 Gihon (owdd) 4,7114Precambrian D&A Testedseveralzones; no details available.Old well completedin 1986.OTD 2,579ft in Yeso (Pemian). 6-3N-7E, Torrance Bruce Wilrcn No. lX Judd 2,8,{0 Permian Perf & acid 1,628-1,6U ft, 1,876-t,82 ft, 2,2462,252,2,4q-2,4M ft (Permian).Oil & gas show reported. 12JN_6E, Tocance fohn Aday No. 2 D'Spain 1.900 Pennsylvanian D&A Spudded in 1983.TD reachedin 1984. Abandoned in 1988. 27-15-13W, Catrcn Shell Westem Exploration & Production No. 1 SWEPI et al. Aspen Federal 9,000 Precambrian D&A "Tight" hole. No reported 21JS-1sW Catrcn Shell Westem Exploration & Production No. 1 SWEPI et al. Mangas Mountains Federal 7,808 Prcambrian D&A "Tight" hole. No reported shows. TD reachedon 11/ 70187. 28-r1N-rew, McKinley Bun Oil & Gas No. 1 Zuni 1,885 Yeso (Permian) D&A lpst circulation at 1,110 ft (San Andres). Encountered wet oil in San Andres (Pemian), mlt water in Glorieta (Pemian), and salt water and oil in Yeso (Pemian). Unable to drill deper or run drill-stem test because hole caved in. Drilled on Pinon Springs anticline. r2187 Tule gasfield of northwest RooseveltCounty continued. in 1988 was coal-bed methane in the Fruitland Formation (Cretaceous).Most exploratory well completions were made by reNorthwest New Mexico entering older wells that had previously proIn L988, 305 wells were completed in duced from Cretaceousreservoirspresent at northwest New Merjco, up from 198 com- Breaterdepths than the Fruitland. pletions in 1987but down from 405 compleMost development drilling in the Sanfuan tions in 1986 and 863 completions in 1985. Basin was for coal-bedmethane in the FruitThe diminished rate of drilling since1986has land. Kelso et al. (1988)estimatedthat the been caused by depressedgas prices and a total gas contained within Fruitland coal beds depressed market for gas, which is the priin the San fuan Basin is 50 trillion fP (TCF); mary petroleum product of the Sanfuan Ba- most of that gas is within the New Mexico sin. Depressed oil prices have also taken a part of the basin. More than 120 developtoll on drilling activity in the SanJuan Basin. ment wells and pool extension wells were Exploratory drilling resulted in two sig- completed in the Fruitland in 1988.Fruitland nificant discoveriesin 1988.Gas was discov- , gas reservoirs have been ignored for many ered in Fruitland coal beds and the Pictured years because of low production volumes; Cliffs Sandstone (Cretaceous)in the Dugan exploration and development have been Production Corp. No. 1 Ollie (7). Gas was concentrated in deeper, more prolific reserdiscovered in Fruitland coal beds during a voirs in the Upper Cretaceous. However, workover of the Meridian OiI Inc. No. 1 Luthy lower costs involved with drilling the shal(8), an abandoned Pictured Cliffs gas weli. lower Fruitland reservoirs (approximately Exploration was concentrated in the north2,000 ft deep) compensatepartially for the central part of the basin in easternSan fuan low volumes of gas production. More imand westem Rio Arriba counties. The prinportantly, producers are eligible for a federal cipal exploration target in the SanJuan Basin gas-production tax credit for wells drilled be- New Merio Geolo3y November 1989 TABLE 3-signifignJ wildcat wells that were being drilled, not completed, "trght" , or planned in New Mexico at the end of 1988.owwo, old well worked over. Number on Fit. 1 Location (section-townshiprange, county) 17 27-8N-18W, Cibola 18 2-30N-3E, Rio Aniba Operator, well number, and lease Comments Menion Oil & Gas No. I Galestina Canyon Drilled to total depth of 2,770 It. Perforated Permian. "Tight" hole. Heyse Oil No. 1 Rio Chama Scheduled to drill to 2,000 ft to PrtramDnanDrilled to total depth of 254 ft then shut down due to mehanical problems. 10-30N-7W, Rio Aniba Blackwood & Nichols Co. No. 501 Northeast Blanco Unit Drilled to 8,956 ft to test Entrada (lurassic). Tested Entrada, Bluff, and Morrison with no reported shows. Converted to water injection well. 19-31N-3E, Rio Aniba Spur Oil No. 1 South Location staked. Scheduled to drill to 1,100 ft to test Entrada (Jurassic). 29-32N-3E, Rio Aniba Spur Oil No. 1 Quinlan Ranch 29 Drilled to total depth of 3,865 ft in Entrada (Jurassic). Perf Crenhom (Cretaceous) from 2,340 to 2,370 tt. 17-27N I7tN, San Juan Chuska Energy No. 1 Table Mesa Navajo Tribal Location staked. Scheduled ro drill to 8,300 fr to test Mccracken Sandstone (Devonian). 13-30N 21W, San Juan Chuska Energy No. 2 Beclabito (owwo) Location staked. Scheduled to test Mccracken Sandstone (Devonian) at 5,000 ft. 1 4F38, Socoro fames K. Anderson No. 1 Wishbone Federal Scheduled to drill to 4,000 ft to test Permian and Pennsylvanian sections. 35-24N-148, Taos Conoco, lnc. No. 1 Taos Trough Unit Scheduled to drill to 6,000 ft to test Pennsylvanian s(tion. Location staked in 1986. Operator changed from Leonard Minerals. 15-2S-28E,De Baca Esperanza Energy No. 1 McClain Ranch Scheduled to drill to 3,000 ft to test Glorieta Sandstone (Permian). 7-145-11E,Otero Cibota Energy No. 1 Ysletano Canyon Federal fore fanuary l, I99L; that tax credit applies to gas produced from those wells prior to the year 2000. As a result of the tax credit, a drilling boom started as operators rushed to develop their reserves before the deadline. Meridian Oil Company and Amoco Production Company are the major operatorsin the coal-bed methane play; Nassau Resources, Southland Royalty, Northwest Pipeline, Blackwood & Nichols, and Union Teias Petroleum also have significant holdings and have drilled wells within the New Mexico part of the San Juan Basin (Neil H. WhiteheadIII, personalcommunication1989).Other significant targets of development drilling for natural gas in 1988were the Pictured Cliffs Sandstone(Cretaceous),sandstonesin the MesaverdeGroup (Cretaceous),and the Dakota Sandstone(Cretaceous). Although developmentdrilling for oil was subordinate to development drilling for gas in 1988, significant efforts were still made. Major targets of development drilling for oil were the Gallup and Dakota Sandstones (Cretaceous)and the lower part of the Mancos Shale (Cretaceous).Effort was concentrated in the Bisti Gallup, South Bisti Gallup, Lybrook Gallup, and West Lindrith GallupDakota oil pools. Production in the SanJuan Basin is almost entirely from Cretaceous reservoirs. Relatively minor amounts of production are obtained from stratigraphic traps in the Entrada Sandstone(furassic)in the southeasternpart of the basin and from Pennsylvanian, Mississippian,and Devonianreservoirsin structural traps along the western flank of the November 1989 New Mexico Gmlogy exploratory wells were drilled in the GallupZuni sag. The Gallup-Zuni sag is a synclinal feature on the west side of the Zuni uplift; it connects the San Juan Basin and the Baca Basin. The Merrion Oil & Gas No. 1 Galestina Canyon (17)was drilled on a prominent anticline to a total depth of 2,770 ft. Production casing was set and perforated. The well was "tight" in early L989, but apparently commercial production was not established. Farther to the north, the Burr Oil & Gas No. 1Zuru(1,6)was spudded on the PifronSprings anticline and subsequently drilled to a total depth of 1,885ft in the YesoFormation(Permian); oil shows were reportedly encounteredin the SanAndresFormation(Permian) and in the Yeso. The well was abandoned becausethe hole cavedin. The Piflon Springs anticline remains poorly tested. The Burr well was drilled as part of an exploration agreement made by the Zuni Pueblo with Burr and High Plains Petroleum Corp. The agreement covers an exploration area of more than 20,000acres.Under the terms of the agreement,two additional weils will be drilled in southwestern McKinley County during 1989.One well will test the Wompia Springs anticline and the other well will test the Galestina monocline. Northeast New Mexico Petroleum exploration continued in the frontier areas of northeast New Mexico in L988.Three wildcat wells were drilled in the basin. Significant exploration focusedon Jur- Tucumcari Basin and two wildcat wells were assic and Paleozoictargets in 1988,but the plugged in the EstanciaBasin. Development Jurassic and Paleozoic remain essentially of the Bravo dome carbon dioxide gas field frontiers for petroleum exploration. continued. Petroleum has not been proIn the central part of the basin, the Black- duced commercially in northeast New Mexwood & Nichols No. 501 Northeast Blanco ico exceptduring a brief period in the 1970's Unit (19)was drilled to a total depth of 8,956 when marginally commercialamounts of gas ft; Entrada, Bluff, and Morrison sandstones were produced from the Morrison Formation (Jurassic)were tested without reported (furassic) and Dakota Sandstone(Cretashows. In the easternmostpart of the basin, ceous)at the currently inactiveWagonMound which is also known as the Chama Basin,the field in Mora County (Fig. 1, letter A). In the Spur Oil No. L Quinlan Ranch 29 (21)drilled t980's, the Newkirk pool (Fig. 1, letter B) has to a total depth of 3,865 ft in the Entrada produced 508 bbls heavy oil from the Santa Sandstone; the Greenhorn Limestone (Cre- Rosa Formation (Triassic)with the aid of a taceous)was testedwithout reported show. pilot steamflood project. McKallip (1987)reThe Heyse Oil No. 1 Rio Chama (18) was ported on the geology of the steamflood scheduled to reach a total depth of 2,000 ft project in the Newkirk pool. In the 1930's, in Precambrian, but drilling was terminated approximately 153,000tons of tar sandswere at a depth of 254 ft becauseof mechanical mined from the Santa Rosa Formation near problems with the rig; it remains unknown the town of SantaRosain GuadalupeCounty if the operator plans to resolve those prob- (Gormanand Robeck,t946;Fig. 1, letter C). lems and continue drilling. Farther north, In the EstanciaBasin of TorranceCountv, location was staked for the Spur Oil No. 1 the Bruce Wilson No. 1X fudd (12), whiih South (20) which reportedly will be drilled had been drilled in 1987,wasplugged in 1988. to a total depth of 1,100ft to test the Entrada. The No. 1X Iudd had been drilled to a total Along the western flank of the San |uan depth of 2,840 ft in the Abo red beds (PerBasin, Chuska Energy entered into an explo- mian). Oil and gas shows were reported, ration agreementwith the Navajo Nation on presumably in the Yeso or Abo Formations their reservation. As a result of that agree- (Permian).The fohn Aday No. 2 D'Spain (13) ment, locationsfor two wells (22,23) were was finally plugged; the well was spudded staked. Those wells are scheduledto drill to in 1983and had been drilled to a total depth the McCrackenSandstone(Devonian),which of 1,900 ft by April, 1984. No shows were unconformably overlies Precambrian base- reported. ment. Presumably, carbonate reservoirs of Exploratory activity continued in the TuPennsylvanianand Mississippianageare also cumcari Basin in 1988.Drilling was concenexploratory targets in those wells. trated along the northern margin of the basin. Elsewherein northwest New Mexico. two The Michael K. Galvis No. 1 State HGH (9) Scheduled to drill to 3,800 ft in Devonian Location staked in 1986. strata. was drilled to a total depth of 1,098 ft in granite wash (Pennsylvanian) and subsequently abandoned. No shows were reported in this well; circulation was lost in the San Andres Formation (Permian).The Esperanza Energy No. 1 Logan State(10)was drilled to a total depth of 3,600ft in Precambrian basement.The Precambrian,a sandstone in the Abo Formation (Permian), and the Tubb sandstone (Permian) were tested through casing perforations, but no shows were reported. The Tom L. Ingram No. 1 Gihon (11;Fig. 2) was re-enteredand deepened in 1988.The well had originally been drilled to a total depth of 2,579ft in 1986and was a San Andres (Permian)test. It was reentered in 1988 and drilled to a new total depth of 4,74 ft in Precambrianbasement. Apparently, severalzoneswere testedbefore the well was abandoned,but detailsof completion and testing operations are not available.Broadheadand King (1988)reportedon the petroleum geologyof the TucumcariBasin. Exploratory activity was quiet elsewhere in northeast New Mexico. No wells were drilled in either the Raton or SanLuis Basins. However, the clastic Cretaceoussection of the Raton Basin has considerablepetroleum potential and wells drilled into the Cretaceous in past years have encountered significant and promising shows of gas. Speer (1976) and Woodward (1987)discussed the petroleum geology of the Raton Basin. A location remained stakedfor the Conoco No. 1 TaosTrough Unit (25)in the Sangrede Cristo Mountains. The location was originally stakedin 1986by Leonard Minerals; the operator was subsequentlychanged to Conoco. The well will spud in the Pennsylvanian section and is scheduled to be drilled to a total depth of 6,000ft. The No. 1 TaosTrough Unit will be the first petroleum exploration well drilled in Taos County. Development of the Bravo dome carbon dioxide gas field of southern Union and southeastemHarding Counties continued at a slow pace.In 1988,two wells were drilled. The main reservoir at Bravo dome is the Tubb sandstone(Permian),which lies at depths of approximately2,000ft. Minor production is obtained from SantaRosasandstones(Triassic). Most carbon dioxide produced from the Bravo dome field is used for enhanced oil recovery in the west Texaspart of the Permian Basin. Eventually, as production wanes from oil fields under waterflood in the New Mexico part of the Permian Basin, carbon dioxide will be used increasingly for enhanced oil recovery in the New Mexico part of the Permian Basin.The demand for carbon dioxide in both New Mexico and Texaswill increase. Exploration for additional carbon dioxide reserves in northeast New Mexico will be needed. Southwest New Mexico Two significant wildcat wells were abandoned in the BacaBasinof southwestemNew Mexico during 1988.The Shell Western Exploration and Production No. I SWEPIet al. Mangas Mountains Federal (15) was drilled Oil and gas production lnl987, New Mexico was the seventhlargest producer of crude oil and the fourth largestproducerofnatural gasin the United States (Energy Information Adminishation, 1988). Production of crude oil and leasecondensate in New Mexico in 1988 was approximately 71.2million bbls, a decreaseof 1.5Vofrom the 72.3 million bbls produced in 1987 (New Mexico Oil ConservationDivision data). Production of natural gas in 1988was approximately 781 billion ff (BCF), a decreaseof 4.0Vofrom the 813BCFproducedin 1987.In 1987,89Voof the state'soil and 52Voof the state's gas were produced from the Permian Basin; LlVo of the state's oil and 48Voof lhe state's gas were produced from the San|uan Basin.As of December31,1987,New Mexico had proved crude oil reservesof 654 million bbls oil, an increaseof 10 million bbls from December 3t, 1,986(Energy Information Administration, 1988); the Permian Basin contains 93Voof the state's proved oil reserves and the San |uan Basin contains 7Vo of the state's proved oil reserves.Additionallv New Mexico had reservesof 63 million FIGURE2-Tom L. lngramNo. 1 Gihon (Fig. 1, bbis of leasecondensateas of December31. no. 11;Table1, no. 11)drillingon the northern 1987 (Energy Information Administration, marginof the TucumcariBasin,fanuary1988. 1988);75Vo of the state'scondensatereserves are in the San Juan Basin and 25Voof the to a total depth of 7,808 ft during 1987 and state's condensate reserves are in the Perwas subsequently abandoned without re- mian Basin. As of December31, 1.987,New ported shows. The Shell No. 1 SWEPIet al. Mexico had proved natural gas reserves of Aspen Federal(14)was drilled to a total depth 12.5trillion ft' (TCF),an increaseof 0.1 TCF from December31,,1986(EnergyInformation of 9,000ft and abandonedin 1988.Both wells are "tight." They were drilled in a federal Administration, 1988); the San |uan Basin explorationunit known as the "MagicArea." contains 75Voof the state's gas reservesand This exploration unit was formed by a con- the Permian Basincontains 25%of the state's sortium of Shell, StandardOil (Sohio, now gas reserves. Those reserve estimates apBP Exploration), and Elf Aquitaine in 1986 parently do not include coal-bedmethane in and covers approximately3.5 million acres the Cretaceousof the San Juan Basin. Kelso in northern Catron and western Socorro et al. (1988)stated that coalsin the Fruitland Counties. A third well, the Shell No. 1 ManFormation (Cretaceous)contain an estimated gas Mountains Federal, located in Sec. 21., 50 TCF gas in place in the San juan Basin; T3S, R15W, Catron County, was drilled and approximately 707oof that gasis locatedwithin abandoned in 7987. Extensivereflection seis- the New Mexico part of the basin. It is not mic surveys have been run by the consor- known what percentageof the coal-bed tium in the Magic Area. The Shellexploration methane is recoverable. and drilling program constitutes the first The decreasein oil production in 1988can comprehensiveeffort to evaluateand test the be attributed to a decline in the price of crude petroleum potential of centralCatron County. oil since January 1986(Fig. 3). The posted Primary targets in Catron County are Upper price of west Texas intermediate crude oil Cretaceoussandstones,the SanAndres For- with a gravity of 40'API (the "benchmark" mation, GlorietaSandstone,sandstonesand crude oil of the United States)fell 55% from carbonatesin the YesoFormation (Permian), $27.251bb1infanuary 1986to $12.25lbblin and Pennsylvanian sandstonesand lime- july 1986. The price subsequently rose to stones. $20.00/bbl in August 7987 and then fell to In eastern SocorroCounty at the northern $l3.75lbbl in November 1988.Since the end end of the jornada del Muerto, plans were of 1988, posted prices for west Texasintermade to spud the |ames K. Anderson No. I mediate crude have risen to $l7.75lbbl in Wishbone Federal (24). That well will be March 1989(Oil and Gasloumal, 1989a),when drilled on the Prairie Springs anticline and this article was written. is scheduled to drill to Precambrian baseThe sharp fall in oil prices at the'bpginning ment at a depth of 4,000ft. Primary targets of 1986was due to a sudden rise ih oil proare Pennsylvanian sandstonesand lime- duction by several major produCing counstones. tries (notably Great Britain and Latin No exploration wells were drilled else- American and Middle Eastern countries) in where in southwest New Mexico in 1988. an effort to increase income from oil reveHowever, the Paleozoic and Lower Creta- nues. The rise in oil production createdan ceous sections of the PedregosaBasin are oversupply of oil and causedprices to plumpromising targets(Thompson,1980,1981). met. A gradual reduction of world petroleum Nao Mexico Geolo3y November 1989 930 .9E 12O o, E) zs 1 o o3 E€ 20 80 c 8t tu 'o El' 56 Fb -E 60 -: *= ;z '\-\--z c ---^\-n ,aT--\ \number of rotary rigs A L a<! ox Av T :_ zv : E E' o 6z ;r=>o>: E*"tS:=i *o6tHE* 3oz6in 19 8 6 !=>o>;y o:oc=:'o t1 f"*=:5<3 ez > -c=>o>;-; oGo O-lL i<*>:5<,H 1987 1988 6:H o:d -)uG 19 8 9 FIGURE 3-Monthly crude oil prices and number of active rotary rigs in New Mexico during 7986,7987,1988, and early 1989. Data from Oil and Gas Journal (1986a,b; 1987a, b; 1988a,b; 1989a,b). stocks, rising worldwide demand, and par- ploration targetsand have added new oil retially successfulattempts by OPEC nati,ons servesand production that have supplanted to reinstate production ceilingscauseda sub- declining production and reserves of older sequent gradual, albeit unsteady, price in- pools. These discoveries were made in the crease. Strawn, Cisco, and Wolfcamp carbonatesof Becauseof the decreasein oil prices, many the Northwest shelf and DelawareBasin, the marginal and stripper wells were shut in or B o n e S p r i n g F o r m a t i o n a n d D e l a w a r e plugged. Their production may never be re- Mountain Group of the Delaware Basin, and gained unless oil prices increasesufficiently the Dakotaand Gallup Sandstonesof the San to justify the expense of re-opening such Juan Basin. wells. Stripper wells are defined as wells that Continued oil discoveriesin the Sanfuan produce less than 10 bbls per day. Approxand PermianBasins,as well as positivesigns imately 20Voof oil production in New Mexico and hydrocarbon shows encounteredby is from stripper wells. wildcat wells drilled in the frontier areas,will Declining oil prices have also resulted in encourage exploratory drilling and devela decreasein drilling and exploration activ- opment. However, the number of active roity, which is reflected in the rig count for the tary rigs in New Mexico is tied to the price state (Fig. 3). Oil reservesfound and devel- of oil (Fig. 3). Gradual declines in future reoped during the "boom" drilling yearsof L980- servesand production will probablybe halted 1982reachedpeak developmentin 1983and only if oil pricesrise enough to increasesub1984.The drilling slump of 1983-1985and stantially the number of activerigs. Oil prices the more seriousdecreasein drilling during must not only rise, but also stabilize if an 1,986,7987, and 1988led to fewer exploratioi increaseof the rig count is to occur. Indeed, and development wells being drilled than in a decline in volatility of oil prices may affect the boom years. As a consequenceof de- explorationand drilling as much as, or more creaseddrilling fewer discoverieswere made than, an increasein prices alone. Until the and existing reseryeswere not developed as rig count increases,exploratory discoveries quickly as in the past. The inevitable result will not keep pace with production and rewas decreasedproduction. serveswill decline,unlessa major discovery The Department of Energy (Energy Inforis made by one of the few rigs currently drillmation Administration, 1988)indicated that ing. However, exploration for, and development of, major oil accumulations are Pfoved reservesin New Mexicoincreasedby 10 million bbls from 1986to L987,but onlv L profitable even at a low price of $10/bbl. million bbls were added by new field discovThe decreasein gasproduction in 1988was e,ries,and only 1 million bbls were added by causedby a decreaseddemand for gas,rather discoveries of new reservoirs in old field6; than a decreasedcapabilityto produce gas. 12 million bbls were added by extensionsof Primary markets for New Mexico gas are in existing fields. This 14 millioh bbb of addiCalifomia, and those marketscontinue to use tions were not sufficient to replace the 69 and convert to alternateenergy sourcesinmillion bbls of crude oil which were procluding fuel oil, hydroelectric power, and imduced during 1987.The calculated10million ported subsidizedCanadiangas.Competition bbls increase of reserves was caused by re- from fuel oil will decreaseif the price of crude vision of reservecalculationsin known fields. oil stays relatively high. The recently signed These revisions resulted partially from infill U.S.-CanadianFree Trade Agreement may drilling programs. The increase did not re- causeincreasedcompetition from Canadian sult from discovery of new hydrocarbons. gas. However, oil discoveries made during the Most of the gasproducedin 1987and 1988 last five to six years provide major new ex- was not replaced by new discoveriesof gas November 1989 Naa Metico Geology in conventionalreservoirs.The calculatedincrease in gas reserves during 1987 (Energy Information Adminishation, L988)was caused mostlv bv revision of calculationsof reserves in known fields. rather than bv discoverv of gas in new fields or by extensionof exisling fields. Only L BCF were discovered in new fields during 1987; L3 BCF were added by discovery of new reservoirsin old fields; 1l{4 BCF were added by extension of existing fields. Theseadditionswere not sufficientto replace the 813 BCF which were produced during 1987.However, the major reservesof coal-bedmethane that were added during 1987and 1988do not appear in the reserve estimates of the Department of Energy. If a market for that coal gas can be found, then the long-term outlook for gas production in New Mexico is good. AcrNowlrocMENrs-Prentiss Childs of the New Mexico Oil Conservation Division provided the well completion statistics. Neil Whitehead III provided informative discussion and information pertaining to coal-bed methanein the San fuan Basin.Frank Kottlowski, Royfohnson, and SamThompsonIII reviewed the manuscript. Lynne McNeil typed the manuscript and Rebecca Titus drafted the illustrations. References Broadhead,R. F., and King, W. E., 1988,Petroleumgeology of Pennsylvanian and Lower Permian strata, Tucumcari Basin, east-centralNew Mexico: New Mexico Bureau of Mines and Mineral Resources,Bulletin 119, 75 PP Cather, S. M., and Johnson,B. D., 1984,Eocenetectonics and depositional setting of west-centralNew Mexico and eastemArizona: New Mexico Bureauof Mines and Mineral Resources,Circular 792,33 pp. Energy Information Administration, 1988,U.S. crude oil, natural gas, and natural gas liquids reserves,1987 annual report: U.S. Department of Energy,Energy Information Administration, 1987annual report, DOBEIA0216(87),105 pp. Gorman, J. M., and Robeck, R. C., 1946,Ggology and asphalt deposits of north<entral Guadalupe County, New Mexico: U.S. GeologicalSuruey,Oil and Gas Investigations, Preliminary Map 44. Kefley,V C., 1978,Gmlogy of EspaflolaBasin,New Mexico: New Mexico Bureau of Mines and Mineral Resources,Geologic Map 48, scale 1:125,000. Kelso, B S, Wicks, D E, and Kuuskraa,V A, 1988.A geologic assessmentof natural gas from coal seamsin the Fruitland Formation, SanJuan Basin, topical report (September1986-September1987.): Gas ResearchInstitute, report GRI 8710341, 53 pp Kottlowski, F E, and Stewart, W I, 1970,The WolfcampianJoyita uplift in central New Mexico:New Mexico Bureau of Mines and Mineral Resources,Memoir 23, pt I, pp. 1-31. McKallip, C , Jr , 7987,New Mexico's Newkirk field: Oil and GasJournal,v 85, no 27, pp 56-57 McKamey, K E , 1988,A symposium of the oil and gas fields of southeasternNew Mexico: Roswell Geoloeical Society,1988symposiumsupplement,336pp Meyer, R. F, 1966,Geology of Pennsylvanianand Wolfcampian rocks in southeastNew Mexico: New Mexico Bureau of Mines and Mineral Resources,Memoir 17, 123 pp. Molenaar, C M , 7977, Stratigraphyand depositionalhistory of Upper Cretaceousrocks of the San Juan Basin area, with a note on economicresources:New Mexico GeologicalSociety,Guidebook to 28th field conference, pp 159-166 Oil and GasJournal, 1986a,SelectedU S and world crude prices: Oil and Gas Journal, v M, no 2, p 85; no 5, p. 134; no 10, p 79; no 15, p 746;no 19, p. 90; no 23, p. 67; no 28, p 120;no 32, p 115;no 35, p 733; no. 41, p 97; no 45, p. 124;no 49,p. 58 Oil and Gas Journal, 1986b,Hughes rig count: Oil and Gas Journal, v 84, no 2, p 85; no 6, p 134; no. 10, '1.5, p 79; no p. 146; no 19, p 90; no 23, p 67; no 28, p 720;no 32, p 115;no 35, p 133;no 41, p 97; no. 45, p 124;no 49,p.68 Oil and Gasfournal,1987a,SelectedU S and world crude prices: Oil and Gas Journal, v 85, no 2, p 83; no 6, p 54; no 10, p 53;no 15, p 75;no 19,p 78;no 23, p 77;no 28,p 99;no 32,p 85;no 37,p 83;no.41, p 103;no. 45, p 98; no 49,p.92 Oil and Cas Journal, 1987b,Hughes rig count: Oil and Gas Journal, v 85, no 2, p 83; no. 6, p 54; no. 10, p 53; no. 15, p 75; no 79, p 78; no 23, p 77; no 28, p 99; no 32, p 85; no 37, p.83; no 41, p. 103;no. 45, p. 98; no 49, p 92 Oil and Gasfournal, 1988a,SelectedU S and world crude prices: Oil and Gas Journal, v 86, no 2, p 84; no 5, p 6 1 ; n o 1 1 , p 8 3 ; n o . 1 5 , p8 4 ; n o 1 9 , p 6 7 ; n o . 2 4 , p 62; no 28, p 125; no 32, p 83; no 37, p. 109;no 47,p 83;no 46,p 733;no.50,p 77 Oil and Gas fournal, 1988b,Hughes rig count: Oil and GasJournal,v. 86, no. 2, p.84; no. 6, p. 67;no.'l'!, p. 83; no. 15, p. 84; no. 79, p. 67; no.24, p. 62; no.28, p. 725;no. 32, p. 83; no. 37, p. lW; no. 41, p. 83; no. 46, p 133;no 50,p 77. Oil and GasJournal, 1989a,SelectedU S and world crude prices: Oil and Gas fournal, v 87, no 2, p 75; no 7, p 60; no 77, p 77 Oil and Cas Journal, 1989b,Hughes rig count: Oil and G" lournu| v. 87, no 2', p 75; no 7, p 50;no 77, p Slaton,M, 1988,Arsenic taints PecosSlopegas:Southwest Oil World, v 36, no 9, p 6 Slaton, M , 1989,Ironing out arsenic-taintedwrinkle: Southwest Oil World, v 37, no 1,1,, pp 74, 17 Speer,W R.,7976,Oil and gas explorationin the Raton Basin: New Mexico Geological Society, Guidebook to 27th field conference,pp 217-225 Thompson, S, III, 1980,PedregosaBasin'smain exploration targetis Pennsylvaniandolostone:Oil and Cas J o u r n a l v, 7 8 , n o 4 2 , p p 2 0 2 , 2 0 7 , 2 1 , 0 , 2 1 5 Thompson, S, nI, 1981,Petroleumsourcerocks in exploration wells drilled to Paleozoicor Mesozoicunits, Hidalgo and Grant Counties, New Mexico: New Mexico Energy Institute, Report EMD-2-66-j306, 120 pp. Thompson,S., III, and Jacka Pennsylvanian , A. D., 798'1, stratigraphy, pehography, and petroleum geology of the Big Hatchet Peak section, Hidalgo County, New Mexico: New Mexico Bureau of Mines and Mineral Resources,Circular176,725pp Woodward,L A ,7987, Oil and gaspotentialof the Raton Basin, New Mexico: New Mexico Geological Society, Guidebook to 38th field conference,pp. 331-338. Woodward,L. A., Callender,J. F, Seager,W. R., Chapin, C. E., Gries, J. C., Shaffer,W. L., and Zilinski, R. E., 1978,Tectonic map of Rio Grande rift region in New Mexico,Chihuahua,and Texas;in Hawley,J. W. (compiler), Guidebook to Rio Grande rift in New Mexico and Colorado: New Mexico Bureau of Mines and Mineral Resources,Circular 153, sheet 2. n statetaxeson Summary of NewMexico production as0l July1, 1989 natural resource Resources NewMexico Bureau of Mines andMineral byJames M. Barker, compiled CommodiW Tax Rate and base Potash Resource Processor; Service* Severance 0.50%of taxablevalue 0 725Voof taxablevalue 2.5% of taxablevalue Molybdenum Resource Processor; Service* Severance 0.333%of taxablevalue 0.757oof taxablevalue 0.7257oof taxablevalue Other taxable resources (except potash and molybdenum) Resource; Processor; Service* 0.75%of taxablevalue Copper Severance Service; Processor* 0.50%of taxablevalue 0.75Voof taxablevalue Gold, silver Severance 0.20%of taxablevalue Lead, zinc, molybdenum, manganese, thorium, rareearth, and other metals Severance 0.1257oof. taxablevalue Clay, gravel, gypsum, sand, pumice/ and other nonmetals Severance 0.725%of taxablevalue Coal: surface underground Severance Severance $1.17per short ton until July 1, 1993 $1.13per short ton until July 1, 1993 Uranium Resource Severance 0.75% oI taxable value 3 5% of 50% of sales price Oil, carbon dioxide Severance 3.75% of taxable value Natural gas Severance $0.153 per 1,000 cu ft or 3.75Vool taxable value, whichever rs higher; except new wells (after May l, 7987) at 3.75% only Oil, gas, and carbon dioxide School Ad valorem 3.15% oI taxable value Many rates (counties certify annually on September 1 to Taxation and Revenue Department) Oil, gas, geothermal energ, carbon dioxide, coal, and uranlum Conservation School 0.78% of taxable value 3.757a of taxable value Gas and hydrocarbons incidental to processing Natural gas processor 0.457oof taxable value *Subiect to only one of these taxes at a time Data source: Taxation and Revenue DeDartment, PO Box 2308. (5051827-2700\ For information about severance and resource taxes contact Santa Fe, New Mexico 875M)308 Cindy Lovato (5051827-0812); for oil and gas taxes contact Michael Holden (505/827-0805) All subscriptions expire with this issue. Renew your subscription by sending $6.00 in the renewal envelope that has been inserted in this issue. Nao Mexico Ceology November 1989 75