Gallup Sandstone Oil Discovery
WPX plans to invest approximately $160 million in 2014 to further develop its Gallup Sandstone oil discovery in New Mexico’s San Juan Basin. This will fund the drilling of 29 planned wells in 2014, nearly doubling the activity level (15 wells) from a year ago.
WPX has increased its land position in the Gallup play approximately 40 percent by securing rights to another 12,000 acres. WPX now has 43,000 net acres under lease. The company’s 2014 capital plan includes funds for continuing to increase this position.
WPX recently added a second rig in the Gallup, which spud its first well on Feb. 6. WPX’s average drilling time on its Gallup oil wells is 16.7 days. WPX’s fastest Gallup well was drilled in just 14.6 days – more than twice as fast as the company’s first Gallup well.
WPX has drilled 16 Gallup oil wells as of early February 2014, including the original four exploratory wells. Thirteen of the wells are on production, with the balance scheduled for completion in February.
WPX’s first 13 Gallup oil wells have flowed – on average – at 388 barrels of oil per day over their first 30 days, or 475 barrels per day on an equivalent basis. The 13 wells had – on average – a peak rate of 727 barrels per day on an equivalent basis.
The company had a December 2013 Gallup exit rate of 2,489 bbl/d, or about 100 barrels per day higher than its planned target of 2,388 bbl/d. On an equivalent basis, WPX averaged 2,875 boe/d during December vs. a forecast of 3,400 boe/d due to a lower gas-to-oil ratio.
For 2013, WPX had cumulative Gallup oil volumes of approximately 290,000 barrels during the year. For 2014, WPX expects to triple its 2013 cumulative oil volumes in the Gallup.