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Summary of oil and gas activity in Arizona through April 2014

Article Author(s): 

Steven Rauzi

Drilling Permits

Eight drilling permits were issued and no wells were drilled through March 2014. Two permits were issued to Gusher State LLC for two oil exploration wells north of Douglas. Six permits were issued to Kinder Morgan for test wells at its CO2 field between St Johns and Springerville.

Potash Exploration

No wells have been permitted or drilled for potash since the second half of 2014. The Oil and Gas Conservation Commission required a permit 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. maintains a potash information website to provide information about potash mining and the Holbrook Basin.

Carbon dioxide (CO2)

Kinder Morgan permitted one additional well in the St Johns Gas Unit in January 2014. Kinder Morgan plans to develop the St Johns Gas Unit as a major supplier of CO2 for enhanced recovery of oil and natural gas. Kinder Morgan anticipates drilling up to 250 wells, building a pipeline and ultimately delivering 450 to 500 million cubic ft 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 accompanying photograph shows a rig drilling one of the CO2 wells in 1997.

CO2 Sequestration

The AZGS joined the Rocky Mountain Carbon Capture and Sequestration partnership (RMCCS) to study CO2 sequestration potential across the Colorado Plateau region. RMCCS drilled a well to characterize the site-specific CO2 sequestration potential of geologic units in the vicinity of Craig, Colorado. Information from the RMCCS well is available at http://rmccs.org/updates.html. The AZGS determined that the Cedar Mesa Sandstone of Permian age has the capacity to store 0.70 billion metric tons of CO2 in northern Arizona. The Cedar Mesa Sandstone underlies the Navajo Generating Station near Page, Arizona. The AZGS also digitized oil and gas well logs into computer usable LAS (Log ASCII Standard) format to aid subsurface investigations using well logs and developed a user-friendly web application to make the digitized well data available online. The online search and download map, the Arizona Oil and Gas Well Viewer, is hosted under the Online Data tab on the State of Arizona Oil and Gas Conservation Commission (AZOGCC) website. The AZGS released OFR-14-03, An evaluation of carbon dioxide sequestration potential of the Permian Cedar Mesa Sandstone, northeastern Arizona, in March 2014 describing the results of its investigation of the sequestration potential of the rock units in northeastern Arizona.

Geothermal Resources

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 but reported no activity in 2013. More information about GreenFire Energy is available at its website http://greenfireenergy.com/.

Oil and Gas Leases 2013

There were 756,000 acres leased for oil and gas in Arizona as of December 31, 2013, up from the 504,000 acres at yearend 2012. Oil and gas leases on State Trust land totaled 716,000 acres as of December 31, up from 477,000 acres in December 2012. Federal land leased as of December 31 totaled 40,000 acres, up from 27,000 acres in December 2012.

Oil and Gas Production 2013

Oil production totaled 59,505 barrels from 25 producing wells through December 2013, up from 51,948 barrels from 21 wells through December 2012. Gas production totaled 9.6 million cubic feet from 4 producing gas wells through June 2013, down from 85.6 million cubic feet from 5 wells through June 2012. No CO2 was produced in 2012 or 2013. There were two active disposal wells and 4 shut-in wells as of June 2013. The Navajo Nation Oil and Gas Company has not yet reported its oil and gas production figures for the Black Rock and Dry Mesa Fields for the second half of 2013.

Oil and Gas Conservation Commission

The Oil and Gas Conservation Commission held three regular meetings in 2013. Current commission members include J. Dale Nations, Tucson, Chairman; Stephen R. Cooper, Casa Grande; Frank Thorwald, Phoenix; Robert L. Wagner, Mesa; and Vanessa Hickman, 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.

Oil and Gas Administrator
Arizona Geological Survey

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