BP Makes Major Discovery in New Mexico’s Mancos Shale

In August 2017, BP said it had brought online a highly productive natural gas well in the Mancos Shale, highlighting the potential of the New Mexico field to be a significant new source of U.S. natural gas supply. Early production rates at the well in San Juan County are the highest achieved in the past 14 years within the San Juan Basin, a large oil- and gas-producing area covering southwest Colorado and northeast New Mexico that includes the Mancos Shale. The well achieved an average 30-day initial production rate of 12.9 MMcfd per day.

The successful well test took place on assets BP acquired in late 2015, which expanded the company’s existing position in the San Juan Basin and provided improved access to the Mancos Shale. “We are delighted with the initial production rate of this well,” said David Lawler, CEO of BP’s U.S. Lower 48 onshore business. “This result supports our strategic view that significant resource potential exists in the San Juan Basin and gives us confidence to pursue additional development of the Mancos Shale, which we believe could become one of the leading shale plays in the U.S.” The NEBU 602 Com 1H well was drilled with a 10,000-foot lateral in an area known as the Northeast Blanco Unit (NEBU), a section of federal lands located in San Juan and Rio Arriba counties, where BP has had a presence since the 1920s.

In early 2015, BP began operating its U.S. Lower 48 subsidiary as a separate business with its own governance, processes, and systems. Since then, the business has achieved significant financial and operational improvements, largely through the use of innovative drilling and completion techniques and the application of data analysis. It has also increased production and added acreage through acquisitions. BP Lower 48 expects to open a new headquarters office in Denver next year that will be closer to the majority of its operated oil and natural gas production assets and proved reserves in the Rocky Mountain Region. The business is currently located in Houston.

BP’s U.S. Lower 48 onshore operations span five states—Colorado, New Mexico, Oklahoma, Texas, and Wyoming—and seven oil and gas basins covering an area roughly the size of New Jersey. With a material resource base of about 7.5 billion barrels across six million net acres, the business has average daily net production of nearly 300,000 barrels of oil equivalent. The business produces natural gas, along with oil, condensate, and gas liquids, from both conventional and unconventional rock formations.