Zapata County, the very tip of South Texas, produces more natural gas each year than any other Texas county. Its neighbor, Webb County, ranks fourth in annual gas production in the Lone Star State. The two counties alone push 1.5 billion cubic feet (Bcf) of gas into pipelines each day. The wells that make a considerable part of this tremendous volume tap Eocene Wilcox reservoirs, most particularly the Lower Wilcox Lobo. The Lobo trend has been producing for more than 30 years but appears far from exhausted. Its overpressured, low-permeability sandstones are riddled with faults and highly compartmentalized. "The Lobo play is very active, and it doesn't seem to change much whether gas prices are down or up," says Glenn Hart, president of privately held Houston-based Laredo Energy LP. Initially, TransTexas Gas Corp. and majors Chevron, Conoco and Mobil dominated the under-appreciated Lobo. In 1997, Conoco acquired TransTexas for more than $1 billion, and the play gained industry-wide notice. Since then, several companies have joined in, including Houston Exploration, EOG Resources, Chesapeake Energy, Pogo Producing, Chevron, Kerr-McGee, Devon Energy, Dominion E&P and Edge Petroleum. ConocoPhillips continues as the largest producer and acreage-holder. Since 1997, it has drilled more than 900 wells, although lately it has been ramping down activity as it nears the end of its development cycle. During 2004, ConocoPhillips' net daily production from the play averaged 291 million cubic feet of gas, and it drilled 73 wells. This year, the major has budgeted 64 Lobo wells. For more on this, see the December issue of Oil and Gas Investor. For a subscription, call 713-993-9320,ext. 126.

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