SUMMARY OF OIL & GAS ACTIVITY, Potash Exploration & CO2 Sequestration IN ARIZONA: January through July 2010
STEVEN L. RAUZI, OIL & GAS ADMINISTRATOR, AZOGCC

Drilling Permits 2010

Two drilling permits were issued, two wells were drilled, and one well was plugged in Arizona in the first half of 2010.

Drilling for potash in the Holbrook basin June 2010. Photo courtesy of Frank Bain, Flagstaff.

CO2 Sequestration

APS (Arizona Public Service) plugged its well near the Cholla power plant at Joseph City to test the potential of sequestering CO2 in deep saline aquifers. The Cholla well did not encounter permeable and porous formations near the power plant. Additional information about the Cholla well and potential for carbon sequestration in Arizona can be found at www.azogcc.az.gov/.

The US Geological Survey awarded AZGS $50,000 in July 2010 to participate in the National Geologic Carbon Dioxide Sequestration Assessment (COTSA) program.  The chief objective is to obtain an updated database of well-log data, and aerial and structure maps and geologic cross-sections of oil and gas traps and geologic units that potentially contain or confine saline fluids, for use in evaluating potential for geologic sequestration of carbon dioxide (CO2) in Arizona. Leading AZGS efforts are senior geologist Jon Spencer and Oil & Gas Administrator Steve Rauzi.

AZGS geoscientist Brian Gootee attended the Rocky Mountain Carbon Capture & Sequestration Project meeting held in Craig, Colorado during the week of 19 July. As part of this project, AZGS will characterize potential reservoir rock on the Colorado Plateau of northeastern Arizona over the next several years.

Geothermal Resources

Utah-based GreenFire Energy is targeting CO2-based geothermal energy about a half-mile beneath the Arizona-New Mexico border near the town of Springerville, Ariz. See the February 11, 2010 Land Letter reports at www.eenews.net/public/Landletter/2010/02/11/1 for more information.

Potash Exploration

Potash Green LLC drilled two stratigraphic wells at its potash project northeast of Petrified Forest National Park near Holbrook. Potash Green may drill additional wells pending analysis of conventional core from the two wells. Southwest Exploration and Passport Metals drilled four stratigraphic wells at its potash project southwest of Petrified Forest National Park in 2009. Southwest Exploration/Passport Potash has applied for eight additional permits to further delineate the extent and grade of the potash deposit.

Oil and Gas Leases 2010

There were 929,958 acres leased for oil and gas in Arizona as of June 30, 2010, down from the 1.319 million acres under lease at yearend 2009.

Oil and Gas Production

Production through May 2010 totaled 11,319 barrels of oil and 282 million cubic feet of gas. Oil production totaled 46,193 barrels from 16 producing wells in 2009, down from 51,575 barrels from 21 wells in 2008. Gas production totaled 712 million cubic feet from 6 producing gas wells, up from 523 million cubic feet from 6 wells in 2008. No CO2 was produced in 2009. There was one active disposal well and 18 shut-in wells at yearend 2009 including 14 oil, 1 gas, 1 CO2, and 2 disposal wells.

Oil and Gas Conservation Commission

The Oil and Gas Conservation Commission held two regular meetings in the first half of 2010. Governor Jan Brewer appointed Robert L. Wagner to the AZOGCC to replace outgoing Commissioner Robert L. Jones. Mr. Wagner's appointment runs until January 2013. Governor Brewer reappointed Commissioner Michele P. Negley. Ms. Negley's reappointment runs until January 2014. Commissioner Negley resigned because she moved out of state in April. Governor Brewer appointed Frank Thorwald to replace Commissioner Katosha Nakai. Mr. Thorwald's appointment runs until January 2015. Links to rules and statutes and other information about oil and gas in Arizona may be found on the Commission’s web page at www.azogcc.az.gov.

Steven L. Rauzi, 07/7/10

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ARTICLE AUTHOR:



Steven L. Rauzi
Oil & Gas Administrator

Arizona Oil and Gas Conservation Commission
Tucson, AZ
steve.rauzi@azgs.az.gov

















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