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Mancos Shale: Great Prospects Still Ahead
01/16/2018
Mancos Shale - a great natural gas shale reservoir on the border of New Mexico, Colorado, and Utah. It's location closely corresponds to that of San-Juan basin. In 2010 it was first drilled by Williams Co. and is proving to be more promising ever since.
Rosa A and Rosa B wells' production averaged 5 MMcf/d (6.4 MMcf/d) in their first 30 days after being drilled. The location was estimated to hold ca. 60 trillion cf reserves at the time of discovery.
It is located across much of the Rockies including the San Juan Basin, where it ranges from 1,500 to 2,000 feet in thickness.
Since 2012 till 2016 Mancos shale gas production grew to 100 MMcfd from 75 wells. This growth continues making this shale more and more competitive compared to Permian.
“The great thing about the Mancos gas play is that, while there haven’t been a ton of wells drilled, there hasn’t been a bad well drilled,” - Jay Paul McWilliams, President and Founder of LOGOS Resources II - “Everything drilled is north of 5 Bcf, even those drilled in 2010. It’s a true resource play. We feel confident the geology is similar across a large portion of our acreage.”
Drilling depth here is between 4,500 and 5,500 feet total vertical depth with laterals extending 7,000 to 9,000 feet. “That’s why people get excited by bit efficiency—drilling is very forgiving in this area.” - Ian Delahunty (CEO & President of Juniper Resources).
It is also evident from studies and production data that horizontal wells far outperform vertical wells in Mancos.
Mancos natural gas takeaway is supported with a robust gas pipeline infrastructure. Main players here include Kinder Morgan, Energy Transfer Partners, LP, Dominion Energy, Inc and Williams Companies. Their pipeline assets are estimated at 1,078 miles of just the interstate operational lines. See the breakdown in a table below.
Key Interstate Pipeline Owners (Mancos Area)
| Kinder Morgan | 593.1 |
| Energy Transfer Partners, LP | 318.9 |
| Dominion Energy, Inc. | 105.9 |
| Williams Companies | 60.6 |
| TOTAL: | 1,078.6 |
The Mancos-adjunct segment of the largest of these owners' lines, El Paso, routes natural gas from the San Juan, Permian and Anadarko basins to California, Arizona, Nevada, New Mexico, Oklahoma, Texas and even to northern Mexico. El Paso Natural Gas Company is the principal operator of this line.
The flow from San-Juan (Mancos inclusive) is significant yet no pipeline constraints are in sight. Mancos gathering infrastructure in the area is naturally as developed. Operators to mention are Enterprise Products Partners, LP, UNK, and Williams Companies.
Future of Mancos looks optimistic. However, additional development also requires lots of capital and effort. Even 20% of the basin when developed would require: (1) 13,000 new wells, (2) Capex of ~ $130 Billion ($10 Million/well) to add infrastructure capex of ~ $25 Billion.
A revenue of 390 Billion can be expected from just this development. At that production level (> 5Bcfd) it will exceed the existing pipeline capacity 2.5 times.
Last thing to mention, an active development of Mancos is likely to begin only after expectations about returns from Permian basin operation begin cooling down. At the moment Mancos as well as some other great reservoirs is waiting on its golden hour, which is yet to come.
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Mascot Project Acquisition: NOG says Midland Basin Deal Is Completed
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On January 5 Northern Oil & Gas (NOG) concluded a deal to acquire working interests in Midland-Petro D.C. Partners LLC (MPDC)'s Mascot Project in the Midland Basin, according to a January 9 press release. Firstly estimated at $330 million in cash, the deal was signed with an additional 3.25% working interest added to the 36.7% agreed upon when the transaction was announced on October 19. NOG paid $29 million more for the additional interests, which now totalled 39.958%. Finally, the deal closed for $320 million in cash and $43 million in debt at signing in October with the finance of Minnetonka, Minn.-based NOG with cash on hand, operating free cash flow, and assistance from its revolving credit facility.
Diamondback finalizes $1.55 billion acquisition of Lario, enhancing Midland Basin portfolio
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Diamondback Energy, an independent oil and gas company, has successfully completed the acquisition of Lario Permian, marking the closure of two major deals in the fourth quarter of 2022. The company purchased two private operators in the Midland Basin for approximately $3.3 billion.
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Rangeland Energy has agreed to sell Rangeland Midstream Canada to Kingston Midstream Alberta and remains committed to future Canadian midstream investments. Texas-based Rangeland Energy, supported by financial partner EnCap Flatrock Midstream, has inked a deal to sell its Canadian subsidiary, Rangeland Midstream Canada Ltd., to Calgary's Kingston Midstream Alberta Ltd. for cash.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/187Blog_ONEOK Completes Acquisition of Magellan Midstream.png)
The merger between ONEOK and Magellan received approval from Magellan shareholders, securing just 55% of the total votes at Magellan’s meeting on Sept. 21. ONEOK Inc. has successfully concluded the acquisition of Magellan Midstream Partners LP on Sept. 25. The deal will bring together their respective assets and expertise, resulting in a powerful entity boasting an extensive network of approximately 25,000 miles of pipelines primarily focused on transporting liquids.
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Viper Energy's deal, comprised of cash and equity, secures an additional 2,800 net royalty acres in the Midland Basin and 1,800 in the Delaware Basin. Viper Energy Partners LP, a Diamondback Energy Inc. subsidiary, has inked a deal to acquire mineral and royalty interests in the Permian Basin. The deal, valued at around $1 billion, is with Warwick Capital Partners and GRP Energy Capital. Viper was established by Diamondback with the purpose of owning, purchasing, and capitalizing on oil and natural gas assets in North America, specifically targeting mineral and royalty interests.