By OGJ editors
HOUSTON, Nov. 22 -- ExxonMobil Gas & Power Marketing Co. has signed a 30-year agreement with Enterprise Products Partners LLC for gathering, compression, treating, and conditioning services for natural gas it is developing in tight sands of the Piceance basin of Colorado.
ExxonMobil began a development program last year of about 270,000 gross acres it holds under lease in the area. Company officials have estimated recovery potential at more than 35 tcf and predicted the area will produce gas for than 50 years.
At a presentation for analysts early in November, ExxonMobil Senior Vice-Pres. Stuart McGill said an initial development project on the leasehold is producing about 50 MMcfd. A first production phase of 150-200 MMcfd is in the "definition stage," he said. Later stages are planned.
"There is the potential for gross production to reach some 1 bcfd at its peak," McGill said.
ExxonMobil is using proprietary "multizone stimulation technology" and drilling multiple deviated wells from individual locations.
"We now routinely fracture 40-50 sands/well and recently completed 64 of these fractures in a single wellbore," McGill told the analysts.
Under the new, fee-based agreement, ExxonMobil dedicates to Enterprise production from 29,000 acres in Rio Blanco County. Enterprise has the option to recover NGL beyond liquids recovery required to make the gas meet pipeline specifications.
Enterprise expects to invest $185 million on new plant and pipeline facilities related to the agreement and to complete construction late in 2008.
It will extract liquids at a gas processing plant it is building at the Meeker hub. The plant will have initial capacities of 750 MMcfd of inlet gas and 35,0000 b/d of liquids extraction. A planned later phase will boost capacities to 1.3 bcfd and 70,000 b/d of liquids.
