BJ, Precision Get Burgos Basin Deal
BJ Services and Precision Drilling were awarded a major field
development contract by Petroleos Mexicanos (Pemex). The project
entails the drilling and completing of 240 gas wells in the Burgos
Basin, which covers more than 21,000 square miles and is located in
the northeastern part of Mexico near Camargo.
A study recently completed by the Gas Technology Institute found
that previous estimates on gas reserves in the basin could be way
below the mark. Rather than prior estimates of 9.7 Tcf of gas, the
Burgos might actually hold between 21 Tcf and 75 Tcf, GTI said.
The basin is a geological extension of the Texas Gulf Coast,
with similar rock formations and expected yield. In the past few
years, the basin's gas production has increased more than
four-fold. Currently, the Burgos is producing about 970 MMcf/d.
Non-associated gas production in the basin should increase, said
the GTI study, reaching a level of 2.3 Bcf/d by 2015.
BJ and Precision said they expect to begin work on their project
in mid May. It is expected to take 24 months to complete. The total
value of the project is estimated at $270 million with BJ and
Precision revenues estimated at $70 million to $80 million each.
BJ Services will provide cementing, fracturing and coiled tubing
services while Precision Drilling's services will include drilling,
wireline, logging and directional drilling. The civil construction
of roads and drilling locations, pipeline installation and tie-in
work will be subcontracted through this partnered project. Rocco
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