The Rocky Mountain area provided years of solid natural gas growth until an upstart called shale oil came along. Now the massive region is providing both, with operators showing that from a lot, they can produce a lot. Here’s a review of area developments surfacing over the past week in 2Q earnings reports from several operators.

WPX Energy has achieved its second exploratory success of the year, this time from the Mancos Gallup Sandstone formation in the oil window of Northwest New Mexico’s San Juan Basin, company management said during an earnings conference call Thursday.

“Based on having more than 31,000 net acres and four successful wells already, we expect resource potential of approximately 66 million boe net to WPX, with approximately 70% of the reserves being oil,” CEO Ralph A. Hill said. Tulsa, OK-based WPX estimates a year-end exit rate of 3,400 boe/d from the new development.

Success in the San Juan Basin would buck an established industry trend. The basin experienced a sixth straight year of production declines in 2012, according to New Mexico’s Oil/Gas Conservation Commission, which expects the decline to continue this year (see NGI, March 18).

Earlier this year, WPX said that with an average production rate of almost 10 MMcf/d in the first quarter, a discovery well in the Piceance Basin may produce in its first few months what a typical well in the Niobrara formation has done over 25 to 30 years (see NGI, May 6). In its first 180 days, the Niobrara discovery well produced 1.4 Bcf of natural gas, and is currently producing 4.4 MMcf/d at a flowing tubing pressure of about 2,300 psi, WPX said Thursday.

WPX reported 2Q2013 adjusted earnings before interest, taxes, depreciation, depletion, amortization and exploration expenses of $210 million, compared with $251 million in 2Q2012. The $41 million decrease was due primarily to lower volumes for both natural gas and natural gas liquids, partially offset by higher domestic net realized average prices.

WPX’s overall production was 1,262 MMcfe/d in 2Q2013, a 12% decrease compared with 2Q2012, but in line with the company’s 2013 forecast. Natural gas production was just over 1 Bcf/d in 2Q2013, down 12% compared with 2Q2012, but WPX said it expects two additional rigs in the Piceance to arrest its gas production decline.

While Black Hills Corp. is putting more emphasis on its utilities longer term, the Rapid City, SD-based company is focused shorter term on “proving up and capturing substantial value” from its oil and natural gas properties in the Mancos Shale plays in the San Juan and Piceance basins, along with new-found interest in Powder River Basin oil, CEO Dave Emery said last week.

“We’re focused on our existing oil/gas properties, primarily the Mancos Shale resources, and also some limited exploration opportunities, primarily oil plays, that will have an impact on our reserve potential,” said Emery, adding that Black Hills may drill up to three new wells in the Powder River Basin later this year.

Black Hills’ existing oil/gas leases in the Piceance and San Juan Basins have a combined net resource potential in excess of 2 Tcf of gas, Emery said. “We believe that is a fairly conservative number based on current well spacing, and we believe it could be higher as we get more information from a technical standpoint,” he said.

Emery said Black Hills has six well drilling permits from the federal Bureau of Land Management (BLM) for exploring on federal lands in the Piceance, but only two are “ready now,” and the other four have conditions for environmental work that the company finds too onerous. Black Hills is in discussions with BLM to try to get some of the conditions removed, he said.

Black Hills reported net income of $18.3 million (41 cents/share) for 2Q2013, compared with $15.1 million (34 cents/share) for the same period last year.

Marathon Oil Corp. said last week that it has “a lot of running room” in both the Bakken and Eagle Ford shale plays. Executive Chairman Clarence Cazalot said that infrastructure bottlenecks of the recent past years in both plays are being cleared away, so acceleration is “certainly an opportunity we have [there], and we certainly will look at the potential to accelerate our development.” Marathon has turned up good results thus far in the Three Forks portion of the Bakken, and the company is doing a good job of ramping up its efficiency and reliability in both plays, he said.

Marathon reported adjusted net income for 2Q2013 of $478 million (67 cents/share) compared to $361 million (51 cents) in the first quarter of this year. For the comparable quarter last year, Marathon reported adjusted net income of $416 million (59 cents/share).

Rail transport of oil is in for a long-term ride in moving burgeoning U.S. crude supplies and other liquids, according to Rick Bott, president of Oklahoma-based Continental Resources Corp., the largest producer in the Bakken. Railroad shipments have accounted for more than 70% of Bakken oil moved to market in the recent months (see Shale Daily, July 11).

Speaking on a 2Q2013 earnings conference call Thursday, Bott said there has been no reduction in the cost of rail shipments and that will not come until additional pipeline takeaway infrastructure under development is in place. But Bott made it clear that Continental sees railroad shipments as a long-term part of the oil sector. Continental’s continued marketing “flexibility” depends on having the rail option, he said.

For the most recent quarter, Continental continued to “balance” its use of pipelines and rail to move its robust production, Bott said. “In August, rail is expected to account for 75% of our Bakken shipments,” he said. “We continue to cultivate new rail customers on the East, West and Gulf Coasts to capture the best price as [refiners’] appetites increase for the premium Bakken barrel.”

For 2Q2013, Continental increased production by 42%, hitting a record daily production level of 135,700 boe/d, CEO Harold Hamm reported, noting that net income for the quarter was $323 million ($1.75/share) compared with net income for the same period last year of $405 million ($2.25/share).