Dec 24, 2018

Energy Service Targets New Mexico

Delaware Energy Services is focusing on horizontal drilling for oil in New Mexico

Delaware Energy Services is focusing on horizontal drilling for oil in New Mexico
Delaware Energy Services is focusing on horizontal drilling for oil in New Mexico.

Delaware Energy Services is focusing on the west, serving the New Mexico portion of the northern Delaware Basin.

According to the Midland Reporter-Telegram, the company has drilled seven saltwater disposal wells serving Eddy and Lea counties in New Mexico.

"By February 2019, we will have finished our eighth well. The Chapman is our current well, and when it's completed, we'll have 230,000 barrels per day of capacity for produced water," said Mike McCurdy, Delaware's vice president of operations, to the Telegram.

According to McCurdy, the company is focused on the New Mexico portion of the Delaware because “horizontal drilling for unconventional oil in New Mexico is producing large quantities of oil and natural gas but also water. It's ideal for a saltwater disposal group's focus."

Vice President of drilling, Jason Goss, said the portion has many benches that are productive and economic enough so producers can make money at current oil prices.

According to the Telegram, they both agree that another reason for focusing on New Mexico is the current lack of saltwater disposal infrastructure there.

“Our goal is to continue drilling saltwater disposal wells,” McCurdy said to the Midland Reporter-Telegram. “We’d like to have 20 wells by 2020.”

Delaware Energy is also installing pipelines to move the water around southeastern New Mexico in addition to drilling disposal wells. According to Goss, this would allow the company to expand its water reuse and recycling capabilities. The goal would be to have capacity to dispose of or reuse 600,000 barrels of water per day, according to Goss.

"We're excited for the opportunity to provide water in the future. Hopefully at some point we'll be a main source of frac [fracking] water,” McCurdy said to the Telegraph. “Some frac jobs require 30,000 to 50,000 barrels of water. As the number of barrels we control daily goes up, as our capacity grows, we may have the ability to send water to operators within a couple of days and provide enough water for frac jobs."

According to the Telegraph, the company disposes of water in the Devonian formation between 13,000 and 17,000 ft.

“We don’t inject into shallower zones. We feel the Devonian is better because it’s deeper than producing intervals,” Goss said to the Telegraph.

According to McCurdy, the topic is “something we spend a lot of time gathering data on, and our petrophysical consultants are doing studies on faults and seismicity.”