Aztec Well Services drilling rig 980 is working for WPX Energy to drill horizontal oil wells into the Gallup Sandstone.
Aztec Well Services drilling rig 980 is working for WPX Energy to drill horizontal oil wells into the Gallup Sandstone. (Courtesy of Jim Blecha)

FARMINGTON — WPX Energy has announced that it has initiated oil development in New Mexico's San Juan Basin after exploratory drilling this spring yielded commercially viable results from the Gallup Sandstone in the Mancos Shale formation.

The wells are located on U.S. Bureau of Land Management and state of New Mexico land near the Lybrook area, which is about 100 miles southeast of Farmington.

WPX has about 159,000 acres under lease in the San Juan Basin, including 31,000 acres in the Gallup Sandstone development.

Staff at WPX's Aztec office are overseeing operations of the discovery.

The first four Gallup Sandstone wells the company drilled flowed at a maximum rate of 488, 623, 1,004 and 800 barrels of oil per day.

WPX now has six producing wells in the Gallup Sandstone, and the company is in the process of drilling a ninth well. The wells are about 5,000 feet in vertical depth with horizontal laterals averaging about 4,000 to 5,000 feet, according to Susan Alvillar, WPX's community affairs representative.

"WPX Energy has operated in the San Juan Basin for over 30 years. To date, we have drilled gas wells, but the nine wells in the Gallup Sandstone are oil wells," Alvillar said. "Our goal is to have eight to 10 additional wells by the end of the year, producing 3,400 barrels of oil equivalent per day."

The Gallup Sandstone is a sandy interval embedded in the Mancos Shale geologic formation. It is about 90 million years old.

WPX has partnered with Aztec Well Service to complete the drilling project. Aztec Well Vice President Jason Sandel said that while he is pleased about the success WPX is having with the Gallup Sandstone, he remains cautious about what the discovery means for the San Juan Basin.

"It's fantastic news. The reports that are coming out are very encouraging for WPX and also for our area," Sandel said. "Our community has been clamoring at the idea that Mancos oil will save us, but other companies have drilled Mancos wells and haven't had as consistent results as WPX has, so I'm remaining cautious about what the next 18 months will hold."

Alvillar said the discovery represents a unique new opportunity for oil exploration in the basin.

"We're very excited about this," she said. "It's a new frontier, and we have great expectations," she said.

Leigh Black Irvin covers health for The Daily Times. She can be reached at 505-564-4610 and lirvin@daily-times.com Follow her @irvindailytimes on Twitter.