Colorado Springs News, Sports & Business

Denver-based company ready to test for oil at El Paso County site

By Ned Hunter Updated: March 19, 2014 at 9:16 pm 0

Mustang Creek Holdings has completed drilling its El Paso County well and is about to test areas around the hole for oil.

The well, south of the intersection of Judge Orr and North Davenport roads, was drilled to a depth of more than two miles. The company has completed encasing the bore site with a casing pipe and cement, and is perforating several target sites along the bored hole to see how much, if any, oil may be in the area.

The perforations made to rock and other formations along the side of the well bore will allow any oil and other fluids along the route to seep into the hole and be extracted for testing, said Bob Davis, vice president of land for Denver-based NexGen Oil & Gas, Mustang Creek's parent company.

The company has so far perforated only one exploratory zone along the bore site. Davis reiterated previous statements that Mustang Creeks' venture in El Paso County is a "wildcat" one, and results won't be known for several months after the exploration is completed.

"We don't know what the formation holds, nor do we know in what concentration it may be," he said Wednesday. "We could produce some oil but mostly water, and decide to shut that zone down."

Mustang Creek was awarded local permits to drill a second well in Elbert County on March 12, Davis said. That well would be drilled on a private ranch about five miles east of the El Paso County well, he said. But Mustang Creek will not begin drilling in Elbert County for several months, if at all, Davis said.

"We will wait on the results of the El Paso County well before we decide our next move," he said.

Mustang Creek is the third petroleum company to drill an exploratory well in El Paso County. Ultra Resources and Hilcorp Energy, both Houston-based companies, drilled at least one well each in the county. Ultra had permits to drill three wells in the county and two within the city, though no activity took place inside Colorado Springs city limits. Hilcorp had two permits to drill within the county. Each company hydraulically fractured one well each.

Both companies announced last year. that they would halt all exploratory drilling in El Paso County after test results showed the grade of oil extracted was unsuitable for commercial use.

Mustang Creek, however, has drilled its El Paso well to a depth of 10,954 feet, Davis said - more than double than either Ultra or Hilcorp drilled. The company is targeting the geological area known as the Pennsylvania and Mississippian. Hilcorp and Ultra searched for oil in the Niobrara shale formation, which is about 5,000 feet below the earth's surface.

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Contact Ned Hunter: 636-0275

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