US boosts Mancos shale basin estimates

OREANDA-NEWS. June 09, 2016. The US Geological Survey (USGS) has significantly boosted its estimates for Colorado's Mancos shale, finding that it contains more than 66 Tcf (1.9 trillion m) of gas. That is up nearly 40-fold from the 1.6 Tcf that the USGS estimated in 2003.

The new estimate places the Mancos shale in Colorado's Piceance basin second only to the giant Marcellus shale in the US northeast in terms of potential resources. The Marcellus is the top US gas-producing field by volume and the key driver behind domestic production growth.

The new Mancos shale estimate "helps solidify our basin's role as a global provider of natural gas production for decades to come," West Slope Colorado Oil & Gas Association executive director David Ludlam said.

The reassessment of the Mancos underscores the strides producers have made in unlocking the vast amounts of gas trapped in shale formations. A boom in US shale production in the last decade helped drive prompt-month gas prices in March to a 17-year low below \\$1.65/mmBtu. Prices have recovered and hit a nine-month settlement high of \\$2.617/mmBtu today amid forecasts for hotter weather that has boosted cooling demand. Prices are still down by 8pc from year earlier and below the levels needed for producers to significantly increase gas drilling.

Operators in the Mancos have completed more than 2,000 wells since the last USGS survey in 2003, pushing the estimate up from the earlier 1.6 Tcf estimate. In addition, the USGS estimates the Mancos contains 74mn bl of oil and 45mn bl of NGLs.

The most recent companies looking to explore the Piceance basin's potential include Caerus Oil & Gas, URSA Resources, and Laramie Energy. Terra Energy Partners is also looking to develop that area of Colorado after it acquired most of WPX Energy's assets in the basin for \\$910mn in April.