WPX Energy Reports Progress on Delineating Niobrara Discovery
Second Niobrara Shale Well Comes on at Nearly 12 MMcf/d
Initial Discovery Well Hits 2 Bcf in Cumulative Production this year
TULSA, Okla. – WPX Energy (NYSE:WPX) successfully completed its second well in the Niobrara Shale following its significant natural gas discovery in western Colorado earlier this year.
WPX’s second Niobrara well was completed at the end of September, posting an initial rate of 11.8 million cubic feet per day at a flowing casing pressure of 5,700 pounds per square inch.
To optimize the performance of the reservoir, the well has since been choked back substantially to 8 MMcf/d at 5,400 pounds per square inch of flowing tubing pressure.
This second Niobrara well is three miles to the southeast of the initial discovery well, which first produced at a rate of 16 MMcf/d with a flowing casing pressure of 7,300 pounds per square inch.
Over its first 10 months, the initial discovery well has produced 2 billion cubic feet of natural gas and is currently producing at a rate of 3.5 MMcf/d.
The Unconventional Oil & Gas Center ranks WPX’s discovery well as the No. 1 Niobrara Shale producing well in the United States. WPX’s latest well will rank No. 2.
The second Niobrara well was drilled to a total vertical depth of 9,062 feet with a 4,883-foot horizontal lateral. Completion operations included 19 frac stages.
“We are executing on our plan to delineate our Niobrara discovery as quickly and prudently as possible,” said Ralph A. Hill, WPX president and chief executive officer. “This aligns with our strength in efficient, large-scale production to build out our long-term horizon of drilling opportunities.”
“Our second well came online even stronger than we expected. It was significantly over-pressured and is delivering another strong performance following our discovery well.
“The Niobrara formation on our acreage is at its shallowest where we drilled the second well. We believe this will coincide with the lowest reservoir pressures we’ll encounter in the play if our assumptions about the geology and pore pressures hold true over time,” Hill said.
A third Niobrara horizontal well was drilled during July and August, located approximately 2,000 feet to the west of WPX’s initial discovery well. A potential sidetrack lateral is being considered to resolve a technical issue that was experienced before completion operations commenced.
From the first Niobrara horizontal well to the third, WPX reduced drilling times by 43 percent from 92 days to 52 days. Drilling on the initial discovery well included the successful recovery of 535 feet of continuous core to assist the company’s geoscience team in better understanding the play.
Two additional Niobrara wells – a horizontal test located three miles north of the initial discovery well and one vertical delineation well located 12 miles to the east – are scheduled to be spud in November.
“These efforts are serving to prove up acreage, confirm the repeatability of the play, drive down development costs and help us determine the right well spacing and density. The Niobrara potential presents an exciting opportunity for WPX,” Hill added.
As previously announced, WPX plans to more than double its Niobrara drilling in 2014, with 10 to 12 wells expected. Combined with previous Niobrara activity, this will serve to delineate 80 percent of WPX’s Valley acreage.
WPX controls the lease rights to approximately 180,000 net acres of the Niobrara/Mancos shale play that underlies the company’s expansive leasehold position in the Piceance Basin.
Gathering and processing infrastructure is in place to accommodate additional gas volumes from the area, as is take-away capacity from the basin to deliver the gas to the market. Gas produced from the Niobrara and Mancos shales can be processed without modification to existing gas treatment facilities.
WPX plans to report its third-quarter 2013 results before the market opens on Thursday, Nov. 7. Management will provide an update on the company’s operations during a webcast starting at 10 a.m. Eastern on the same day. Participants are encouraged to access the event and the corresponding slides at www.wpxenergy.com.
About WPX Energy, Inc.
WPX Energy is an exploration and production company focused on developing its significant oil and gas reserves, particularly in the liquids-rich Piceance Basin, the Bakken and Three Forks oil shales and the Marcellus Shale. WPX also has domestic operations in the San Juan and Powder River basins, as well as a 69 percent interest in Apco Oil and Gas International. Go to http://www.wpxenergy.com/investors.aspx to join our e-mail list.
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This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the company expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company. Statements regarding future drilling and production are subject to all of the risks and uncertainties normally incident to the exploration for and development and production of oil and gas. These risks include, but are not limited to, the volatility of oil, natural gas and NGL prices; uncertainties inherent in estimating oil, natural gas and NGL reserves; drilling risks; environmental risks; and political or regulatory changes. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. The forward-looking statements in this press release are made as of the date of this press release, even if subsequently made available by WPX Energy on its website or otherwise. WPX Energy does not undertake and expressly disclaims any obligation to update the forward-looking statements as a result of new information, future events or otherwise. Investors are urged to consider carefully the disclosure in our filings with the Securities and Exchange Commission, available from us at WPX Energy, Attn: Investor Relations, P.O. Box 21810, Tulsa, Okla., 74102, or from the SEC’s website at www.sec.gov.
Additionally, the SEC requires oil and gas companies, in filings made with the SEC, to disclose proved reserves, which are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible – from a given date forward, from known reservoirs, under existing economic conditions, operating methods, and governmental regulations. The SEC permits the optional disclosure of probable and possible reserves. From time to time, we elect to use “probable” reserves and “possible” reserves, excluding their valuation. The SEC defines “probable” reserves as “those additional reserves that are less certain to be recovered than proved reserves but which, together with proved reserves, are as likely as not to be recovered.” The SEC defines“possible” reserves as “those additional reserves that are less certain to be recovered than probable reserves.” The Company has applied these definitions in estimating probable and possible reserves. Statements of reserves are only estimates and may not correspond to the ultimate quantities of oil and gas recovered. Any reserve estimates provided in this presentation that are not specifically designated as being estimates of proved reserves may include estimated reserves not necessarily calculated in accordance with, or contemplated by, the SEC‘s reserves reporting guidelines. Investors are urged to consider closely the disclosure in our SEC filings that may be accessed through the SEC’s website at www.sec.gov.
The SEC’s rules prohibit us from filing resource estimates. Our resource estimations include estimates of hydrocarbon quantities for (i) new areas for which we do not have sufficient information to date to classify as proved, probable or even possible reserves, (ii) other areas to take into account the low level of certainty of recovery of the resources and (iii) uneconomic proved, probable or possible reserves. Resource estimates do not take into account the certainty of resource recovery and are therefore not indicative of the expected future recovery and should not be relied upon. Resource estimates might never be recovered and are contingent on exploration success, technical improvements in drilling access, commerciality and other factors.