ExxonMobil Unlocks Gas Potential Of Colorado’s Piceance Basin

The Piceance Basin in northwest Colorado contains trillions of cubic feet of natural gas. ExxonMobil has been operating in the basin since the 1950’s, producing modest amounts of gas that was easy to recover. The majority of the natural gas is in scattered pockets deep underground in very dense rock. These “tight gas” deposits up to 16,000 feet deep have been known for decades, but have been too difficult and expensive to recover.

ExxonMobil engineers are using proprietary fracturing technologies to recover the gas and reduce environmental impact. Rio Blanco County is the home of ExxonMobil’s Piceance project. The project covers an area larger than 3,000 square miles and according to ExxonMobil holds a potential resource of more than 45 trillion cubic feet of gas. ExxonMobil uses a proprietary Fast Drill process and Multi-zone Stimulation technology to access up to 50 gas-bearing zones in one well. They can drill up to 9 to 10 wells from a single pad. Each well can recover gas located across 20 acres below ground.

ExxonMobil announced in June the completion of new field processing capacity at its Piceance Project. The new facilities have the capacity to handle up to 200 million cubic feet per day of natural gas. ExxonMobil is currently producing about 100 million cubic feet per day. Enterprise Products Partners LP constructed the new plant and pipeline facilities to provide compression and treating services for the produced natural gas.

Commentary – ExxonMobil has been running more than five drilling rigs for more than two years and as of July, they were running seven rigs despite the current low natural gas prices. ExxonMobil’s new facilities includes a system that collects and reuses water that is produced with the natural gas production, reducing the use of fresh water in the drilling and fracturing process by about 80%. The claims made by ExxonMobil as to the potential seem very optimistic. If you take 200 million cubic feet per day (the maximum for their facilities) and assume they produce the maximum for 40 years, you only recover about 3.0 trillion cubic feet of natural gas or only 7% of the potential. I am assuming that their estimate of 45 trillion cubic feet must include other areas or formations that are not currently being developed.