The venerable San Juan Basin, discovered in the 1920s, has been actively drilled since the 1950s. Along the way, it has gone through several periods of high drilling activity. During the 1950s, 1970s and late 1990s, operators chased the Cretaceous Mesa Verde formation. In the early 1990s and from 2003-05, the Fruitland coalbed-methane areas garnered new attention. Fairly steady activity was seen in the fractured sandstones in the Dakota and Pictured Cliffs formations as well. This basin has produced 31 trillion cubic feet of gas to date by more than 300 oil and gas operators. It was a big building block for the early success of Devon Energy Corp. and the former Burlington Resources (now owned by ConocoPhillips). But these days, operators are trying to maximize all they can from the gas-rich basin. Williams Cos. of Tulsa is one of those. It has been one of the top 10 producers in the San Juan since the early 1980s and currently ranks seventh. The assets it operates there reached a production high of 143 million cubic feet per day in February 2003. But despite drilling 90 additional wells between then and June 2005, volumes had remained at about 135 million a day. The company was fighting a 7% to 8% annual decline, certainly not unexpected in such an old field. For more on this, see the May issue of Oil and Gas Investor. For a subscription, call 713-260-6441.

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