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WPX Steps Up Outreach in San Juan Basin

In an area with more than a century of oil and natural gas development mixed with the Navajo Nation, increased exploration and production (E&P) activity spurred by increased hydraulic fracturing (fracking) is raising newfound concerns among local residents in the Four Corners area of northwestern New Mexico.

Tulsa-based WPX Energy Inc. management thinks it is up to the challenge and is stepping up its outreach to local Navajo residents, many of whom are royalty owners. The operator plans to drill up to 40 wells this year in the San Juan Basin, which straddles New Mexico and Colorado.

WPX this year is investing up to $150 million in the basin, spokesman Kelly Swan told NGI's Shale Daily last Friday. Historically, WPX has paid out about $100 million in royalties, bonuses and leases from production in the southern end of the play.

“We have a very active relationship” with local stakeholders, Swan said. The company recently listened to local stakeholder concerns and shared its plans during a public meeting in Nageezi, NM.

 Swan said WPX has continued to have "good relations" with the local Native American residents, many of whom have long-time family ties to the oil and gas sector. However, in the local chapter house meetings this year Navajo residents repeatedly questioned the public health and safety of living close to wellsites and the pipeline and storage infrastructure that go with E&P activity.

A fire last year at a WPX facility destroyed 36 oil and produced water storage tanks at a drilling site in New Mexico, in which 30 tanks were used for temporary oil storage. No injuries or damage to adjacent property were reported in the rural patch of the far northwest corner of the state, two miles south of Nageezi.

WPX has maintained that drilling activity was not involved in the blaze because the nearby wells had been completed before the fire erupted. The company provided lodging to three families that were displaced.

However, some have called for public health studies so residents can get more information on whether or not the fire affected their health. Others are also concerned about maintaining their ability to lease their land to oil companies. Many received their land through a federally administered allotment process that has been in place since the early 20th Century.

WPX said for 2015 it paid $35.8 million for royalties related to San Juan wells on federal, state and Native American lands, another $21.6 million in severance and ad valorem taxes, and $10.1 million to private landowners.

Meanwhile, WPX, which has shifted from natural gas-focused production to capture more oil and liquids, also continues to bear down in the Permian Basin, where it partnered with Howard Energy Partners to develop gathering and processing infrastructure in the Stateline area of the Delaware sub-basin in West Texas. The 50-50 joint venture (JV) announced last month would support drilling on around 50,000 net acres, or 37%, of WPX’s 135,000 net-acre position in the Delaware.

Additionally, WPX has secured additional takeaway capacity for its Delaware natural gas volumes and an equity position in the related pipeline.

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