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Pemex Produces Its First Shale Gas

Mexico's state-owned petroleum company, Petroleos Mexicanos (Pemex), announced Wednesday that it has started producing its first shale gas from a test well in Mexico's portion of the Eagle Ford Shale play.

Pemex said the test well, Emergente 1, began producing shale gas in February and is now currently producing at a rate of 2.9 MMcf/d. The well is located in the Hidalgo 1 exploration area, atop the Sabinas-Burro Picachos formation of the Eagle Ford in the northern state of Coahuila, Mexico.

"That's a decent well," Jason Simmons, an analyst with DI Energy Strategy Partners in Austin, TX, told NGI's Shale Daily on Thursday. "A lot of the wells that we're seeing right now in the Eagle Ford in Texas that we can compare it against are mostly oily type wells. Even the gas condensate wells that have produced in Texas have produced more gas than [2.9 MMcf/d]. But this is their first well and it's hard to say how good this well is going to be. And that's a decent amount for their first try."

The company said it plans to repair existing wells in the Eagle Ford, drill 10 additional test wells and study two additional shale formations in Coahuila, La Pena and Glenrose. Both formations are located near the town of Piedras Negras, which sits on the U.S.-Mexico border across from Eagle Pass, TX.

"The test technology developed by Pemex Exploration and Production was successful," Pemex said in a translated statement. "It will be applied to other fields in the area in order to assess the existing potential for shale gas production. Those fields are similar to gas shale fields in South Texas, which currently produce 300 MMcf/d of natural gas and about 40,000 b/d of crude oil."

Pemex added that should the Sabinas-Burro Picachos region prove to be productive, it would examine four other regions in the country believed to be rich in shale gas. Of those regions, Chihuahua and Burgos are located in the north, while Tampico-Misantla and Veracruz are on the country's Gulf of Mexico coast.

"This is a pretty big step for [Pemex], to be out there drilling this," Simmons said. "You don't see too many international companies doing this. A lot of them partner up with American companies, learn the techniques and the technology, and then go drill in their own countries."

According to Pemex, total natural gas production averaged 6,892 MMcf/d in January, the lowest since March 2010 and below the 2010 monthly average of 7,020 MMcf/d. But consultants have predicted that growing demand for natural gas makes Mexico, now a gas importer, an attractive market for shale gas production (see Shale Daily, Dec. 20, 2010).

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