Encana could drill six more wells by midyear

Encana Corp. said Friday it plans to drill up to six more wells in the Tuscaloosa Marine Shale during the first half of the year after encouraging results from its first two in the oil-rich formation.

Encana’s announcement comes a day after Devon Energy, which has completed two wells in the Tuscaloosa Marine Shale, said it plans to have eight more by the end of the year.

The Tuscaloosa Marine Shale, which stretches across Louisiana’s midsection and lies 10,000 feet to 17,000 feet or so underground, may contain as many as 7 billion barrels of oil, as well as natural gas, according to a 1997 report by LSU’s Basin Research Institute. Technology is making drilling the shale possible.

Kirk A. Barrell, president of Amelia Resources, of Texas, has said that before the formation can be considered economically viable, 10 to 20 wells will have to be completed and the decline rate of production from the wells evaluated over 12 to 15 months.

Encana’s first two exploratory wells in the Tuscaloosa Marine Shale produced an average of 330 barrels and 700 barrels of light sweet crude in their first month of production, the company announced Friday.

“It is early days, but we are excited by our results to date, which show the Tuscaloosa to be a substantive oil system …,” Jeff Wojahn, executive vice president and president, USA division, said in a news release.

The company has about 290,000 acres leased in the formation, which stretches across the middle of Louisiana into Mississippi.

The announcement was part of Encana’s 2011 earnings report. Encana reported a profit of $128 million, or 17 cents per share.