FARMINGTON — Two large oil and gas companies that have operations in the San Juan Basin have reported positive earnings for the first quarter, according to reports released this month.
Encana had net earnings totaling about $116 million during the first quarter of 2014 and WPX reported an $18 million net income for the first quarter.
However, for the local performance, the earnings are mixed between oil and natural gas.
"San Juan oil production from our Gallup development was up, while our local natural gas production declined," stated WPX spokesman Kelly Swan in an email.
The company drilled three new wells in the Gallup Sandstone development during the first quarter that produced about 420 barrels of oil during their first 30 days in operation, according to a press release.
Currently WPX has two rigs running in the San Juan Basin and production in the first quarter was up by 13 percent compared to the previous quarter.
The company reported 108 MMcf/d, million cubic feet per day, of natural gas production in the first quarter which is up compared to the fourth quarter in 2013, but down 13 percent from last year's first quarter production. One million cubic feet of natural gas is enough natural gas to serve the needs of about 1,000 average-sized homes for four days, according to the American Gas Association.
The company also noted that it plans to invest $160 million in the San Juan Basin and drill 29 wells, which is double last year's number.
Encana reported that well costs are trending downward in the San Juan Basin adding to the company's success.
The company reported that it spent less than $5 million on the last four wells drilled and from time from starting to drill to removing a rig has dropped from 13 days in 2013 to about 11.5 days this quarter, according to the company's earnings report.
The company currently has one rig running in the play and plans to have four running by the end of the third quarter.
Doug Hock, Encana spokesman said the company expected to have two rigs running by the end of May.