Denver Post
Exxon idea ready to go

Friday, March 06, 2009

Exxon Mobil's latest project in western Colorado will produce natural gas by the end of this month, the energy giant said Thursday.

The first phase of the company's Piceance Basin project will produce 200 million cubic feet of gas per day - about 10 percent of the current total daily production in the basin, according to consultant Bentek Energy in Evergreen.

Exxon said the project, located in Rio Blanco County, will use a new fracturing technique that allows it to extract more gas at lower costs.

"They drill down holes to a certain depth, and they perforate the first intervals and begin producing gas out of it, and as that well begins to decline, they come back up the hole and drill up and perforate other intervals to keep the well flowing at the same rate," said Anthony Scott, a senior production analyst at Bentek.

"If you can keep the production at a higher sustained rate for months on end because you're hitting all of these other intervals that you weren't hitting before, then it should really drive the cost down for Exxon in the Piceance and allow them to produce economically even at lower gas prices," Scott said.

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