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 Canonica
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