FARMINGTON — Despite all of the talk surrounding the Mancos Shale, few companies yet are tapping into it.

Encana Corporation, one of the companies pioneering the drilling of the local shale formation, urged others to join in Monday during the first day of the "San Juan Basin Energy Conference" held at San Juan College. The conference continues today.

"You guys need to start digging wells out here — start poking around," said Jeff Balmer, Encana's San Juan Basin asset manager.

Encana, which has teamed up with local oil and gas producer Dugan Production Corp., invested about $100 million last year in development of the Mancos Shale. It will invest about the same amount this year, Balmer said.

"The other companies — they're taking a wait-and-see approach," Balmer said.

Encana and a handful of other companies still are pursuing the Mancos Shale, despite the slow pace of their competitors.

Rumors, however, started that Encana may be backing off an initial plan to drill 100 wells in 2013.

It is nothing but hearsay, Balmer said, and Encana's interest relies solely on what it finds in the Mancos Shale and also what it finds in other areas of interest.

"We're continuing to drill. We're drilling as we speak," Balmer said, noting that the company drilled about 10 wells to tap the Mancos Shale in 2012. It hopes to drill roughly one well every month in 2013.


Although, more activity in the Mancos Shale would make it more valuable and worth more investment, Balmer said.

While companies for years have leased the land over the Mancos Shale formation, they are sitting on those leases, waiting for someone to strike a sweet spot -- a spot with lots of oil. Natural gas also is found in the Mancos Shale, but natural gas prices are low and production is not as profitable.

Oil is selling at more than $90 a barrel, compared to gas which is selling at slightly less than $4 per million British thermal units.

The shale, which consists primarily of black shale, sandstone and carbonates, has pockets of both, geologists said, though how to reach those pockets remains under discussion.

Horizontal drilling, as opposed to conventional vertical drilling, and hydraulic fracturing, a process by which natural gas is extracted by injecting fluids into rock layers, are among the technological advances making shale oil production more profitable.

Still, it is just talk. While other shale formations have created boom towns overnight, Mancos exploration still is quiet. There is no sense of urgency.

"Everything that's available is already leased, so you don't have a giant land rush," said Tyson Foutz, principal of Petroleum Engineering and Oilfield Consulting.

Foutz explained that companies every few years have to dig a handful of wells to keep their leases, but they do not usually invest much and do not usually make much.

"The companies are just tying up acreage," Foutz said.

Jenny Kane may be reached at, 505-564-4636. Follow her on Twitter