Tapping the unknown: Geologists remain divided about Galisteo Basin reserves

Geologists remain divided about oil and gas reserves in the Galisteo Basin

Robin Martin | The New Mexican

1/20/2008 - 1/17/08

Are there economically exploitable deposits of oil and gas in the Galisteo Basin?

The answer is maybe or maybe not.

The question has been on everyone's mind since it was revealed last fall that Houston-based Tecton Energy had leased mineral rights in the area and was planning to drill three wells.

Oil exploration has been going on in the Rio Grande Rift for almost a century, but the area has never been economically viable. With the current price of oil, things may change, but, again, they may not.

Bruce Black, the geologist who drilled the only producing well in the Galisteo Basin, is very enthusiastic about the prospects of an economically viable oil field.

But another petroleum geologist familiar with the area said he expects hydrocarbon finds in the basin "would not be large."

Scientists can make some basic predictions using geophysical studies, but it's impossible to say exactly what lies out of sight beneath the ground. Even drilling a well will only tell for certain what is going on in a small geographical area.

Looking for oil is akin to searching for a medical problem in a patient. Doctors can use MRIs, CT scans, X-rays and other methods to look inside, but surgery is the really sure way to make a diagnosis. Even then, it only tells what is going on in one part of the body.

Geologist's perspective

Geologists do know many things about the Galisteo Basin. Most important, they know it contains the same kinds of rocks that produce oil and gas to the northeast in the San Juan Basin.

The most promising layers are the shales of the Mancos Formation that were laid down in the Cretaceous Period about 85 million years ago, when a vast inland sea covered the middle of the North American continent.

Both the Albuquerque and Española basins, geologic features filled with thousands of feet of sediment washed off the Rocky Mountains after the Rio Grande Rift began to form 30 million years ago, have been sites of oil exploration for almost a century.

The first well, drilled in 1914 southwest of Santa Fe near the Sandoval County line, reported two shows of oil. In the 1920s, a couple of wells were drilled in the Galisteo Basin, and one had shows of oil and gas. The early wells were true wildcats, and probably didn't even penetrate Cretaceous rocks.

Two wells drilled in 1937 and 1961 in northern Santa Fe County showed small amounts of oil and gas, probably from much earlier Paleozoic Era rocks.

Geologists have subdivided the southern part of the Española Basin into several sub-basins, or embayments. To the west is the Santo Domingo Basin; in the center is the Hagan Embayment; to the east is the Santa Fe Embayment, which includes the Galisteo area. A total of 33 wells have been drilled in the Española Basin, 22 in the Santa Fe Embayment, 11 in the Hagan Embayment. The most recent well was drilled in 1994.

Black said many of these wells have had shows of oil from Cretaceous rocks, and some could have produced gas commercially if there had been a pipeline in the area.

Limited success

Black's one-man oil company drilled the basin's most successful well to date — Black Ferrill No. 1 — on the Cash Ranch, southeast of Galisteo. It began to produce 40 barrels of oil per day in 1985, what he says is the first production from the Rio Grande Rift. It has produced only intermittently since then. "The bottom fell out of the oil market in 1980," Black explained. But at $100 per barrel today, he added, "1980s wells that were subeconomic are now economic." Today, Black Ferrill No. 1 could bring in $4,000 a day.

Some of the information gleaned by drilling is public. Within a few months of drilling, companies must turn over their well logs plus data on the engineering and construction of wells. The well logs show stratigraphy (layers), lithology (kind of rock) and porosity. But if a geologist is on-site to look at the rock cuttings that come up from a well, he or she doesn't have to report whether there was a show of oil.

Ron Broadhead, principal petroleum geologist for New Mexico Bureau of Geology and Mineral Resources at New Mexico Tech in Socorro, says the school has cuttings from 20,000 wells drilled in the state, all donated by oil companies.

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Exploration of the Española Basin isn't limited to wells. Oil companies including Transocean and Pelto have paid for seismic studies to learn something about the composition and structure of the underground rock layers. Statewide studies of magnetic data collected in airplane flyovers, which can help identify the kinds of rocks in the area, also exist.

And geologists still explore the old-fashioned way, by fieldwork that looks at the stratigraphy and structural geology. Black said oil staining has been found on rocks in the Galisteo area, a large seep occurs in the Hagen Embayment, and water wells have produced small amounts of gas.

The viability factor

Black is enthusiastic about the prospect of commercial oil production in the southern Santa Fe Embayment. He is, of course, a consultant to the oil exploration company Tecton. He also owns some of the mineral rights on the Cash Ranch, where the well he drilled has produced oil.

But Black does have extensive experience in the industry, including having worked as a senior staff geologist for Shell Oil and as a consultant for the French company Elf. And he has roots in the area. His grandfather managed the coal mine — in the Menefee Formation — and mill in what is now the ghost town of Hagan. While Black was in high school, his father surveyed the area for the railroad that would take the coal to the main line of the Atchison, Topeka and Santa Fe Railroad.

Black is a promoter of oil production in the rift and in no way apologetic for his discoveries or their impact: "Subdivisions make much more of a footprint," he said.

Other geologists are not so sure economic quantities of oil and gas will be found south of Santa Fe. One professor, who does not wish to be named, called the Cash Ranch well "marginal."

Several pointed to wells in the Albuquerque Basin as more promising.

Broadhead said Tecton has leases on the West Mesa near Albuquerque, with plans to re-enter old wells, which he believes may produce gas. In the Albuquerque Basin, the company leases a total of about 200,000 acres, according to Black.

Chris Fling, vice president of land and mineral development for Tecton, said his company has been in "serious conversations with a couple of pueblos" in the Albuquerque area regarding leases it holds on private, state and pueblo land in the Albuquerque Basin. But there has been little public concern, in contrast to the consternation of Galisteo-area residents to news of the company's oil exploration intentions.

When asked why no objections were raised previously to exploration in the Galisteo area, Broadhead said: "I suppose it was less populated, and societal concerns were different."

Contact Robin Martin at newsroom@sfnewmexican.com.