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Summary of oil and gas activity in Arizona through July 2011

Article Author(s): 

Steven Rauzi

Drilling Permits
Sixty five drilling permits were issued and 44 wells have been drilled through July. All are stratigraphic wells for potash.

CO2 Sequestration
The AZGS is evaluating several geologic formations in northeastern Arizona in conjunction with a U.S. Geological Survey (USGS) national assessment to estimate carbon dioxide storage potential. The AZGS is preparing depth and thickness maps for the Permian Coconino/DeChelly sandstones, Devonian McCracken sandstone, and the Cambrian Tapeats sandstone for the USGS assessment.

Geothermal Resources
Utah-based GreenFire Energy was awarded $2 million by the Department of  Energy (DOE) to investigate 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 for more information.

Also in connection with CO2-based geothermal energy and sequestration, Mary Kate McCarney, Los Alamos National Lab, and Caroline Lo Re, University of Wyoming, are examining rock core, available at the AZGS core repository, from the Springerville area to help develop an understanding of the hydrological, geochemical and geomechanical process associated with geologic carbon dioxide sequestration and geothermal systems. Mary Kate and Caroline are interested in using the Springerville area as a geologic analogue for companion experiments and field work.

Potash Exploration
Southwest Exploration/Passport Potash drilled 19 wells at its potash project west and southwest of Petrified Forest National Park near Holbrook. Passport has one rig working in its ongoing drilling program. HNZ Potash drilled 15 stratigraphic wells southwest and east of Petrified Forest National Park. HNZ has one rig working in its ongoing drilling program. American West Potash drilled seven wells at it potash project east of Petrified Forest National Park. American West has two rigs working in its ongoing drilling program. A permit is required from the Oil and Gas Conservation Commission for the potash test wells because the holes penetrate the Coconino sandstone, a potential helium reservoir in the area of the Petrified Forest National Park.

See AZGS’s Holbrook Basin Potash map service for the areal extent and isopach map of the potash deposit, and for well locations and accompanying well permit information. 

Gas Storage
Arizona Natural Gas Storage (ANGS) requested the Federal Energy Regulatory Commission (FERC) to terminate its pre-filling review process regarding its proposed natural gas storage facility in the Picacho Basin. ANGS determined that the financial viability of the project is questionable at this time.

Oil and Gas Leases 2011
There were 783,100 acres leased for oil and gas in Arizona as of June 30, 2011. This is up from the 710,000 acres leased as of January 1, 2011, but down from the 930,000 acres under lease as of June 30, 2010.

Oil and Gas Production
Oil production totaled 40,137 barrels from 14 producing wells in 2010, down from 46,193 barrels from 16 wells in 2009. Gas production totaled 183 million cubic feet from 5 producing gas wells, down from 712 million cubic feet from 6 wells in 2009. No CO2 was produced in 2010. There was one active disposal well and 20 shut-in wells at year end including 16 oil, 2 gas, 1 CO2, and 2 disposal wells.

Oil and Gas Conservation Commission
The Oil and Gas Conservation Commission held three regular meetings through July 2011. The Commission granted an application by Ridgeway Arizona Oil Corporation to drill and produce carbon dioxide and helium gas wells on 160-acre spacing units in its St Johns Gas Unit in Apache County. Producing zones to be spaced are within the Permian Supai Formation and underlying granite wash. 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.

Oil and Gas Administrator
Arizona Geological Survey

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