Gallup Oil Update
WPX decreased its spud-to-rig release time in the Gallup oil play to 10.3 days per well during first-quarter 2015. This is an improvement of 18 percent compared to an average of 12.5 days in fourth-quarter 2014.
WPX also set new bests for drilling time and feet drilled on Gallup wells during the first quarter, drilling one well in just 8 days and drilling 4,600 feet in a 24-hour period on another.
During first-quarter 2015, WPX completed 15 new oil wells in the San Juan Gallup oil play. Previously, WPX completed 47 Gallup wells in 2014 and 13 in 2013.
WPX has taken steps to lower the basis differential on its San Juan Basin Gallup oil sales from roughly $13 per barrel during 2014 to approximately $8 to $10 per barrel. WPX will start to realize a portion of this benefit in second-quarter 2015, with the full impact realized in the second half of 2015 and beyond.
WPX also continues to build out a new oil, gas and water gathering system for its Gallup development activity. Last year WPX installed 95 miles of pipeline.
WPX installed another 37 miles of pipe during the first quarter, with plans to construct another 55 miles during the balance of the year. This ultimately furthers margin expansion efforts in the basin.
Our 2015 capital program includes $295 million to $320 million for the San Juan Basin, primarily for further development of our Gallup oil discovery. During 2014, we nearly doubled our Gallup acreage to approximately 85,000 net acres.