By Chuck Slothower The Daily Times
Updated: 04/23/2013 03:38:16 PM MDT
An Encana Corp. well near Huerfano (Daily Times file photo)
FARMINGTON: Encana Corp. on Tuesday announced positive results from its San Juan Basin oil exploration, saying the effort had "reached commerciality" with production expected to exceed 1,700 barrels of oil equivalent per day.
The Canadian company, which has been the most aggressive firm in testing the potential of San Juan Basin oil, said it may add a rig by year's end to the two now operating in the basin.
Encana said it is working to add to its 166,000-acre position in the basin.
The publicly traded company included the update in a quarterly report released Tuesday.
Encana said the last five wells completed have initial 30-day production rates of 150 to 700 barrels of oil equivalent per day, producing 80 percent oil.
Well costs are $5 million to $6 million per well, the company said. The type of wells Encana has drilled require horizontal drilling and multiple hydraulic fractures.
Encana's positive results came just over two weeks after Farmington's Merrion Oil and Gas announced that its corporate partner Bill Barrett Corp. of Denver had ended a deal to explore for San Juan Basin oil. No wells were drilled under that agreement.
In March, San Juan College hosted a major conference on the potential for an oil shale play in the basin.
Chuck Slothower can be reached at firstname.lastname@example.org; 505-564-4638. Follow him on Twitter @DTChuck.