WILDCAT CAMPAIGN NEARS IN NW NEW MEXICO

One of the most widespread and significant exploratory campaigns in recent years will fire up soon.

Merrion Oil & Gas Corp. of Farmington has entered into an option agreement with Santa Fe Energy Co. to wildcat on areas of mutual interest on more than 600,000 acres of Santa Fe-held lands in northwestern New Mexico.

Petroleum Information of Denver reports that the pact calls for exploring to begin within a year on prospective lands in San Juan, McKinley, Sandoval, and Cibola counties, New Mexico. And, if options included in the agreement are exercised, exploration could take place on the acreage for the next dozen years. Completion of the exploratory phase could be done within an additional five years, according to the Merrion report.

JURASSIC ENTRADA OBJECTIVES

Wildcatters will seek out Jurassic Entrada dune sand accumulations, listric fault traps, fractured production, and conventional structures.

Merrion, who now operates seven Entrada oil pools in the San Juan basin of New Mexico, says that the agreement gives the company access to Santa Fe's geologic and seismic data on the lands. This includes structure maps, satellite photos, and about 800 miles of seismic data. That seismic package, according to the company, together with Merrion's existing seismic data base, will provide the firm with more than 3,000 miles of data with which to explore in the San Juan basin.

We noted in an earlier column, Feb. 6,1989, p. 54, that Merrion has been busy in the basin for 4 years doing seismic work. And, the company says it has identified over 100 prospective sites for exploring purposes. The option pact with Santa Fe, plus its year-old exploration agreement covering the Lee Ranch (150,000 acres), gives Merrion rights to look over some 750,000 acres in northwestern New Mexico. This in addition to about 100,000 acres of oil and gas leases that have been acquired on identified exploratory sites, according to Pi.

IN UNTESTED SECTORS

Part of the area to be searched is the Gallup-Zuni basin which contains a number of northwest trending asymmetric anticlines with sufficient closure to contain large reserves of hydrocarbons.

The Pinon Springs anticline, for example, has over 1,000 ft of surface closure, big for even New Mexico. Shallow Permian formations show excellent reservoir quality in this part of the state.

The San Juan basin is one of the major hydrocarbon producing provinces in the Rocky Mountains; for that matter, the world. Huge gas reserves have been tapped in the basin through the years. And, the search continues, Production occurs in two essentially geographically separated areas which can be further distinguished by type of production (oil vs. gas) and by type of trap, On the Four Corners platform, hydrocarbons are mostly oil and associated gas.

Nonassociated gas occurs in underpressured low-permeability reservoirs in the essentially structureless low part of the central San Juan basin. The main trapping mechanism for this unusual type of gas accumulation has been attributed to hydrodynamics.

Of extreme interest to San Juan basin watchers is the report that Devon Energy Corp. has revised upward by 25% its estimates of natural gas reserves recoverable from its coal seam interests in the Northeast Blanco Unit. Recently, the company revised its coal seam gas reserves from 31.7 billion to 39.6 billion cu ft. In October, the company acquired more coal seam interests in the unit. Those estimates, also, were changed to read 34.1 billion cu ft. The Oklahoma City firm now says its total coal seam gas pot is 73.8 billion cu ft.