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Denver-based oil company to begin drilling in El Paso County

January 9, 2014 Updated: January 9, 2014 at 7:27 pm
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An Ultra Resources drilling rig in El Paso County. Ultra announced in early March that it was abandoning its search for oil and gas at least for the foreseeable future. (The Gazette file) Photo by

Mustang Creek, a subsidiary of Denver-based NexGen Oil & Gas, is expected to begin drilling for oil in east El Paso County on Friday, hoping to find what two other companies couldn't.

The well is just south of the intersection of Judge Orr and North Davenport roads.

"The rig is already on site," said Bob Davis, vice president of land for NexGen Oil & Gas.

NexGen is the third petroleum company to drill an exploratory well in El Paso County. Ultra Resources and Hilcorp Energy, both based in Houston, each drilled at least one well in the county in 2012, but decided to halt exploratory work after tests showed the oil in the area was unsuitable for commercial use.

But Davis said Mustang Creek will vertically drill much deeper than Ultra Resources and Hilcorp, which NexGen officials hope will yield usable oil.

Mustang Creek is targeting the geological areas known as the Pennsylvania and Mississippian, which are about 9,000 to 11,000 feet below the earth's surface, Davis said. Ultra and Hilcorp drilled to a depth of about 5,000 feet, targeting an area called the Niobrara shale formation.

Davis said it will take about three weeks for his company to reach 11,000 feet.

"Once that depth is hit, we will run electric logs that take readings from the subsurface, and based upon the logs, we will decide whether or not to collect sidewall core samples from the surrounding formation," he said.

The sidewall samples will let Mustang Creek know the permeability of the core's surrounding rocks and the organic content, which helps determine if oil is present. Other tests will show if any oil near the drill core will produce the needed amount of oil to make drilling economically feasible.

The company plans on drilling only vertical wells at this time, Davis said. It would go to hydraulic fracturing - fracking - only if test results warrant it. . Fracking is the controversial process that forces a mixture of water, sand and chemicals into a well under high pressure to unlock oil and gas deposits trapped in tight rock formations. While several entities across the state have banned fracking, it is legal in El Paso County. Colorado Springs officials have yet to adopt rules regarding vertical drilling or the use of fracking within the city limits.

Mustang Creek expects to complete its testing operations by the end of March, Davis said. After that, well core data and other test results will be monitored for several months before a final decision on long-term drilling is made.

Depending on the results of its El Paso County well, Mustang Creek might drill a second well in Elbert County on a private ranch about two miles northeast of the El Paso County well. The company has not yet acquired a county permit for drilling that well.

"We are going to watch this first well for awhile before sinking several million into the second one," Davis said.

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Contact Ned Hunter: 636-0275

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