BP announces major shale gas discovery in New Mexico

By Patrick C. Miller | August 08, 2017

BP this week announced that it has brought a highly productive natural gas well online in the Mancos Shale of New Mexico’s San Juan Basin, highlighting the field’s potential as a significant new source of U.S. natural gas.

The company said early production rates at the NEBU 602 Com 1H well achieved an average 30-day initial production rate of 12.9 million cubic feet per day, the highest achieved in the past 14 years within the San Juan Basin. This basin is a large oil and gas producing area spanning southwest Colorado and northeast New Mexico that includes the Mancos Shale.

“We are delighted with the initial production rate of this well,” said Dave Lawler, CEO of BP’s U.S. Lower 48 onshore business. “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.”

The successful well test took place on assets BP acquired in late 2015, which expanded the company’s existing position in the San Juan Basin and provided improved access to the Mancos Shale.

According to BP, the NEBU 602 Com 1H well was drilled with a 10,000-foot lateral in an area known as the Northeast Blanco Unit, a section of federal lands located in San Juan and Rio Arriba counties of New Mexico. BP has had a presence there since the 1920s.

In early 2015, BP began operating its U.S. Lower 48 business as a separate business, with its own governance, processes and systems. Since then, it’s achieved significant financial and operational improvements, largely through the use of innovative drilling and completions techniques and the application of data analytics. It has also increased production and added acreage through acquisitions.

In December 2015, BP announced the acquisition of Devon Energy’s assets in the San Juan Basin. The deal consisted largely of Devon’s operated interest in the Northeast Blanco Unit, a section of federal lands located in San Juan and Rio Arriba counties of New Mexico, which included 480 wells on over 33,000 gross acres. 

BP Lower 48 expects to open a new headquarters office in Denver in 2018 that will be closer to the majority of its operated oil and natural gas production assets and proved reserves in the Rocky Mountain region.

BP is a global producer of oil and gas with operations in more than 70 countries. Over the past 10 years, BP has invested $90 billion in the U.S. The company employs about 14,000 people across the U.S. and supports more than 130,000 additional jobs through its business activities.