Lower Well Costs and 25% Increase in EURs Drives Decision to Resume Completions and Add Two Rigs
The decision follows significant process improvements, structural changes to lower costs, successful discussions with key vendors, a technical analysis of WPX’s well performance that led to higher estimated ultimate recoveries (EURs) and favorable results from larger stimulations.
WPX has rapidly driven costs out of its Williston operations. The
company’s estimated drilling and completion costs in the basin are
The company is now recognizing a blended type curve of approximately 750 Mboe for its wells in the Middle Bakken and Three Forks formations, up 25 percent per well from previous estimates of 600 Mboe. This is based on historical well performance and the success of incremental completion changes WPX performed in late 2014.
“The combination of cost reductions and higher EURs gives us the
opportunity to generate returns in excess of 30 percent in today’s
commodity price environment,” says
“This helps set us up for 20 percent oil volume growth in 2016. We’re realizing the value we have on this acreage to a fuller extent through technical excellence, improving the way we develop the asset, and looking at the operations through a new lens,” Muncrief added.
WPX has more than 85,000 net acres in the core of the
The company currently has an inventory of 14 Williston wells awaiting completion. This work is scheduled to resume in August, starting with a four-well pad.
WPX is scheduled to test 10-million-pound stimulations with more stages, more entry points and a higher pump rate in the second half of 2015 using 100 percent sand on its Williston wells. The company previously used a combination of sand and ceramic proppant.
WPX’s completion modifications include moving toward a higher intensity slick-water design targeting the potential to increase initial production rates and EURs even further.
“Increasing the stimulation size is about pursuing additional upside for our EURs. The collaboration we’re seeing from service providers makes this the perfect time to proceed,” Muncrief added.
The company estimates
WPX currently has one rig deployed on its Williston acreage. The company plans to go with a second rig in August and a third in November.
STAYING WITHIN CASH FLOW
Funding for additional Williston activity primarily is derived by
redeploying cost savings the company is incurring and reallocating
capital from its
WPX plans to move to a one-rig program in the Piceance during the second half of the year and evaluate the extent of Piceance-related completions based on commodity prices.
Total planned capital investments for full-year 2015 remain in line with the company’s previous guidance of staying within its projected operating cash flow.
Additional information about WPX’s EURs in the
WPX Energy develops and operates oil and gas producing properties
in North Dakota, New Mexico and
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
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.
WPX Energy, Inc.
Kelly Swan, 539-573-4944