KLINE — A drilling rig towers 116 feet above Fort Lewis Mesa, sprouting from dry ground owned by a local ranching widow.
The rig is drilling Swift Energy Co.’s first well in La Plata County, a horizontal well south of Hesperus exploring for oil in the Niobrara formation.
Swift is following a nationwide trend toward exploring for oil, which is far more profitable these days than natural gas. The economics have led Swift and other companies to search for oil in the San Juan Basin, an area historically home to natural-gas production.
The well is the second horizontal well drilled in La Plata County, after one drilled in 2012 by Red Willow Production Co., a Southern Ute Indian Tribe company.
“Obviously, our geologists saw something that appeared to be appealing,” said Bob Redweik, a Swift Energy spokesman. “We hope it’s successful, but this is an exploratory well. It could be our last one. If it’s promising, we’ll do another well to test the theory.”
Swift is eyeing a second well location nearby to the east on Kikel Ranch, owned by George and Mae Morley. The Houston-based oil and gas firm has leased more than 70,000 acres in the area.
Red Willow also is evaluating the area.
Swift’s first well, Waters 34-12-32 1H, will plunge almost half a mile underground before turning to the west and piercing another 4,000 feet laterally.
Drilling began Sept. 8. Swift hosted a tour of the well site Wednesday for public officials and others involved in the project.
Swift is not planning to hydraulically fracture the well, a departure from the usual practice in the basin. Swift geologists believe natural fissures in the rock may yield oil without the need for fracking, Redweik said.
County Commissioner Gwen Lachelt said Swift had been transparent about the project to date, but she urged the company to hold a public forum if it later decides fracking the well is necessary.
“I just think it would be consistent with their community outreach to date to host a community meeting if they decide to frack,” she said.
If fracking proves unnecessary, Swift may avoid attention from anti-fracking activists. There’s also a bottom-line benefit.
“You can save money,” Redweik said.
Redweik said he could not release a cost estimate for the well. However, similar wells drilled by Encana Corp. in New Mexico’s portion of the San Juan Basin cost $5 million to $6 million, according to public investor releases.
Swift’s drilling rig has prompted some complaints from neighbors about the bright lights that are visible from miles away in the dark skies of this flat, sparsely populated area near the New Mexico border. In response, Swift turned off some of the lights that weren’t necessary for safety, Redweik said. But others remained on.
“Some of it you just can’t avoid,” he said. “You’ve got to have it.”
The drilling operation has produced one small spill. A truck tipped over on the entrance road, spilling 1 gallon of gasoline. The spill was reported immediately and cleaned, Redweik said.
Drilling is expected to take two more weeks. After that, Swift will begin to test the well’s potential.
With oil commanding more than $100 per barrel and natural gas hovering at only $3.50 per thousand cubic feet, producers are likely to continue to explore for oil.
Opal Waters, whose family decades ago leased its ranch land where Swift is drilling, said the drilling could provide broad benefits for the community.
“I told them, drill, baby, drill,” she said.
