USGS responds
The Mar. 10, 2003, issue of the OGJ, p. 10, included a letter to the editor from Mr. John B. Somers II, president of High Plains Petroleum Corp., entitled "Limits on federal land." Mr. Somers also wrote to Secretary of the Interior Gale Norton, where he challenged the USGS assessment of undiscovered petroleum resources of the San Juan basin province of New Mexico and Colorado.
On behalf of the Secretary, USGS Director Charles Groat has officially responded to Mr. Somers. Following is the letter.
A.B. Wade
Public Affairs Specialist USGS
Thank you for your letter of Jan. 20, 2003, to Secretary Gale Norton concerning the United States Geological Survey (USGS) assessment of oil and gas resources in the San Juan basin.
We would like to address the specific concerns raised in your letter regarding the recently released USGS San Juan basin assessment.
* The exclusion of the Pennsylvanian Total Petroleum System (TPS) from the San Juan basin resource. For the recently released resource assessment, the USGS adopted a modified procedure from that used in the 1995 assessment. In the 1995 assessment, the USGS included a brief overview of the Pennsylvanian plays and geology in the San Juan basin, but the actual Pennsylvanian resources were included in the Paradox basin assessment. The majority of the Pennsylvanian plays were developed in the Paradox basin, although the plays do extend to some extent into the geographic area covered by the reassessed San Juan basin. However, rather than artificially separate the geologic plays into the two basins, the USGS decided to keep them together in the Paradox basin. Unfortunately, the USGS did not clearly address this difference in the recently published fact sheet, FS-147-02 "Assessment of Undiscovered Oil and Gas Resources of the San Juan basin province of New Mexico and Colorado, 2002." However, the assessment team is currently completing the detailed documentation of the San Juan basin and in that report they do mention that the assessment of the Pennsylvanian Petroleum System was included in the Paradox basin assessment of 1995.
* The Todilto TPS estimate. In assessing the Todilto TPS, the USGS examined all publicly available geologic, seismic, and production data in estimating the undiscovered potential additions to reserves for the Entrada Assessment Unit, the reservoir unit for the oil generated from the Todilto. There are no publicly available data to support the generation of 10-15 billion bbl of oil as you mentioned in your letter. Even if documentation to support this were available, much of this potential oil may have migrated to the outcrop during basin tilting and subsequent erosion. Public reports discuss the effects of water washing and removal of oil from some of the Entrada reservoirs, implying that post-deposition hydrodynamic forces have been important in the southern part of the basin.
Undoubtedly, additional oil fields will be found in the Entrada, but whether these will meet the minimum production cutoff (0.5 million bo/d for the 2002 assessment) is still speculative and so the USGS results reflect this uncertainty. Examination of the recent and historical wildcat drilling and subsequent production has not defined any major fields since the 1970s. Recently published seismic studies, including 3D seismic, of the Entrada on the southeast side of the basin were not encouraging or optimistic in postulating large, undiscovered fields in the Entrada. However, the USGS does recognize that because there are so few wells drilled in the Entrada, seismic data will be required in order to delineate potential sand dune crests that are the prime target for exploration and trapping oil. Recognition of these prime targets was taken into account in the recent assessment. However, the USGS was constrained by using publicly available data for assessing the Todilto TPS.
* The Mancos-Menefee TPS. The USGS adopted a different methodological approach in assessing the Mancos-Menefee TPS than it did in the 1995 assessment and the undiscovered potential additions to reserves shown on fact sheet FS-147-02 reflect this new approach. In 1995, Play 2008 of the Mancos-Menefee TPS was assessed for both oil and gas as unconventional in calculating the undiscovered resources. However, although the oil in the Mancos-Menefee TPS appears geologically to represent a continuous oil play, examination of field boundaries and drill hole data between fields suggests that production from this play is more conventional in nature. In other words, if the area were to be developed, the fields would be discrete, conventional-type fields, rather than a regional, continuous-type accumulation. Based on the data available, the USGS decided to use conventional-type accumulation methodology for assessing the oil portion of the Mancos, thus estimating sizes and numbers of fields to be found, and the undiscovered potential additions to reserves reflects this change. The 2002 assessment did recognize a continuous basin-centered gas play in the Mancos that is marginal and basinward to the oil play.
The USGS San Juan basin assessment team produced some of the background data cited in the Oil & Gas Journal report you included with your letter. The target areas outlined in the report are speculative and circumscribed in space because of structural control. This aspect of the report's findings further supports the USGS interpretation that oil resources are not continuous over a broad area but rather are probably localized. Therefore, even though the Mancos oil may appear geologically to represent a continuous oil play, assessing it as such may lead to higher potential additions to reserves than is realistic.
Charles Groat
USGS