By OGJ editors
HOUSTON, Apr. 9 -- A shale gas play on the Colorado side of the Raton basin has recovery potential exceeding 2 tcf of gas net to Pioneer Natural Resources Co. from about 21 tcf in place on its acreage, the Dallas company said.
The play covers 134,000 acres of the 318,000 acres the company has leased in the basin, all of which is held by coalbed methane production. Planned Raton basin drilling of 175 wells in 2008 will include 15 Pierre shale wells.
Pioneer said five wells are producing 2 MMcfd of gas from one of five prospective zones in Cretaceous Pierre laminated shale, and five more wells are in early stages of completion and production to test play boundaries.
Gross thickness of the Pierre, a Mancos equivalent, is 2,200-2,800 ft at 4,000-6,000 ft. The lowermost interval is 200-400 net ft thick.
The company, which identified the play 18 months ago, said it has 1,200 risk-adjusted potential drilling locations based on 80-acre spacing. Wells will be drilled from new and existing pads, and gas will be produced through the CBM facilities.
Pioneer expects its Pierre proved reserves to reach 70 bcf by the end of 2008 and more than 200 bcf by the end of 2010. It recorded 18 bcf of proved reserves as of Dec. 31, 2007.
The first two vertical Pierre shale discovery wells have been producing from the lowest interval only for 16 and 10 months, respectively. The next two shallower intervals have been identified as productive.
Pioneer plans to assess the potential upside from horizontal drilling, which is under way, and the potential to produce from the shallowest two shale intervals.
The company expects to average $1 million/well plus $200,000 per frac interval for an average finding and development cost of $10-15/boe and average before tax internal return rate of 40% at $8/Mcf.
"Pierre shale activity is expected to accelerate in 2009, supporting a compounded average annual production growth rate from the Raton basin of 10-15%," Pioneer said.
