Thirty four drilling permits were issued and 16 wells were drilled through June 30, 2012. All but three permits and one well drilled were stratigraphic tests for potash east of Holbrook. One of the non-potash related permits was issued to Triomphe Energy out of St George, Utah, for an oil exploration well about 15 miles north of Holbrook. Triomphe drilled its well to a total depth of 4521 ft and continues to evaluate the results. The other two were issued to Kinder Morgan for carbon dioxide tests at the St. Johns Gas Unit.
Carbon dioxide (CO2)
Kinder Morgan finalized its purchase of the CO2 properties between St Johns and Springerville from Enhanced Oil Resources (Ridgeway Arizona Oil Corporation). Kinder Morgan is testing 11 existing wells and plans to drill two or three new wells later this year. Kinder Morgan hopes to develop the field as a major supplier of CO2 for enhanced recovery and expects it could drill up to 250 wells, build a pipeline and ultimately deliver 450 to 500 million cubic feet of gas a day to the Permian Basin by 2016. Ridgeway Arizona Oil Corporation drilled the discovery well for the CO2 field in August 1994.
The AZGS is evaluating several geologic formations in northeastern Arizona as part of the Rocky Mountain Carbon Capture and Sequestration (RMCCS) team and the West Coast Regional Carbon Partnership (Westcarb). The primary focus of the RMCCS team was to drill a stratigraphic well to characterize rock formations in and around the town of Craig, Colorado, for their potential as future carbon dioxide sequestration options. The daily drilling progress and activity of the RMCCS State #1 well is available at http://rmccs.org/updates.html.
GreenFire Energy is investigating CO2-based geothermal energy technology near Springerville in east-central Arizona. Greenfire plans to use geothermally heated carbon dioxide to produce electric power. See GreenFire Energy’s website at http://greenfireenergy.com/ for more information.
Southwest Exploration/Passport Potash drilled five wells at its potash project west of Petrified Forest National Park near Holbrook. Passport is continuing its drilling program into the second half of 2012. American West Potash drilled 10 wells at it potash project east of Petrified Forest National Park. American West finished its drilling program in the first half of 2012. A permit is required from the Oil and Gas Conservation Commission for the potash stratigraphic wells because the holes penetrate the Coconino sandstone, a potential helium reservoir in the area of the Petrified Forest National Park. The Little Colorado River Plateau Resource Conservation and Development Area, Inc. developed a potash information website to provide information about potash mining and the Holbrook Basin. See the new website at http://www.holbrookbasin.org/index.html.
Oil and Gas Leases 2011
There were 541,000 acres leased for oil and gas in Arizona as of June 30, 2012, up from the 511,000 acres at yearend 2011. Oil and gas leases on State Trust land totaled 508,000 acres as of June 30, up from 479,000 acres in December 2011. Federal land leased as of June 30 totaled 32,000 acres, unchanged from 32,000 acres in December 2011.
Oil and Gas Production
Oil production totaled 36,925 barrels from 9 producing wells in 2011, down from 40,137 barrels from 14 wells in 2010. Gas production totaled 168 million cubic feet from 5 producing gas wells, down from 183 million cubic feet from 5 wells in 2010. No CO2 was produced in 2011. There were two active disposal wells and 24 shut-in wells at yearend including 20 oil, 2 gas, 1 CO2, and 1 disposal well. One disposal well was plugged in 2011.
Oil and Gas Conservation Commission
The Oil and Gas Conservation Commission held two regular meetings in the first half of 2012. Current commission members include J. Dale Nations, Tucson, Chairman; Stephen R. Cooper, Casa Grande; Frank Thorwald, Show Low; Robert L. Wagner, Mesa; and Maria Baier, ex-officio member and State Land Commissioner. Links to rules and statutes and other information about oil and gas in Arizona including online well data and logs may be found at the Commission’s web page at www.azogcc.az.gov.