The operations of WPX Energy Inc. in the Williston Basin continue to perform very well, James J. Bender, WPX president and CEO said in a Feb. 27 conference call.
“We had excellent results in the Williston Basin in 2013 with oil production up 39 percent year over year,” he said, “In fact, over recent one and two year periods, WPX has been the number one cumulative middle Bakken long lateral producer in the basin.”
The company reports an average 365-day cumulative production of 136,800 barrels of oil per well based on North Dakota Industrial Commission production data, which WPX says is 52 percent higher than the average of its peers in the basin. And on 730-day basis, the company reports average production of 240,800 barrels per well, 66 percent above peers.
WPX is conducting a downspacing test to analyze the benefits of denser well placement in its Williston acreage in southwest Mountrail and northeast McKenzie counties.
“In the fourth quarter, we began our infield density drilling program and expect to be able to announce production results in our second quarter call,” Bender said.
WPX is realizing a payoff from its infrastructure investments in the Bakken.
“Our Van Hook gathering system, with current throughput of 7,500 barrels a day is providing better netback pricing and improved gas sales,” Bender said. “Importantly, in December alone, the Van Hook system reduced over 1,000 truckloads of oil.”
Science project
WPX is approaching its downspacing pilot program with a scientific eye.
“We’ve been discussing over the past year or so what we called a science project; a lot of deep analysis under way to help us confirm well density across our acreage position,” said Bryan Guderian, WPX senior vice president of operations. “Through evaluating cores, logs and various pressure information, along with actual well performance, we’ve come to some initial conclusions, and we’ve begun the process … of setting up our pads for tighter well spacing and infill development.”
WPX is adding one additional middle Bakken to a three well pad north of the Van Hook area on the Fort Berthold Indian reservation, Guderian said, adding that results look favorable, but the company will not be ready to make a conclusion on increased density in the Three Forks formation until the second quarter.
South of Lake Sakakawea in the Mandaree area, WPX has had a longer production history from the Three Forks and its Middle Bakken wells are performing well, Guderian said. WPX is increasing middle Bakken laterals from four wells to six wells per pad and Three Forks laterals from three wells to five wells per pad. The new pattern will boost the total lateral count to 11, versus the company’s prior plan of seven wells.
“We’ll be completing some of these wells late first quarter and should have some results in the second quarter,” he said.
In 2013, the company spud 49 total wells with four rigs and made great strides in cycle times and costs, Guderian said.
“Fifteen wells were turned to first sales in the fourth quarter,” he said, adding that the company shrugged off challenges of the wicked winter weather.
“Certainly, I think we probably could have done even better if the weather had been mild,” he said. “However, due to winterization efforts that we’ve undertaken over the last couple of years and great focus by our field operations personnel, we kept our wells on stream and made our year, our quarter and our exit targets.”
In the next few weeks WPX will add a fifth drilling rig in the Bakken, Guderian said. “We expect to drill 62 total wells in 2014, and that activity should generate 30 percent to 35 percent production growth for the year.”
Exceeding expectations
Guderian does not shrug off the significance of the company’s leading position in cumulative production per long lateral well in the Bakken.
“We do look really good in this analysis versus the peer group,” he said. “I think it’s indicative of the quality of the reservoir that we have, the quality of our well construction and in particular the effectiveness of our completion design.”
Guderian said WPX took criticism for costs when it made an early move to cement liners and more traditional plug-and-perf completion designs, “but this has proved to be a best practice in the basin, and our well results reflect the quality of how we’re drilling and completing these wells.”
WPX conducted either dual or triple fracks on 17 pads in 2013, which cuts down on cycle times, Guderian said, adding that the company is reluctant to change its completion design due to the success of its wells, however it is experimenting with promising new completion designs prompted by well reservoir characterization studies in its pilot program and it expects to have production results later in the year.
WPX had a strong reserve booking at the end of the year, Guderian said, calling both middle Bakken and Three Forks well performance outstanding.
“We increased our average middle Bakken reserves by about 6 percent and also increased our average well reserves for Three Forks by some 17 percent, he said. “So what we see in our reservoir is continued strong performance and, at least during 2013, performance that exceeded our expectations.”
Shifting south
Guderian said in 2014 WPX will shift its geographic focus south of Lake Sakakawea, in the direction of the bulk of the company’s acreage.
“Our program in 2013 was heavily oriented towards development on the Van Hook Peninsula, which is the area north of the lake and would reflect activity on our northern tier acreage, if you will,” he said. “Our 2014 development plan will be focused predominantly in what we call the Mandaree area, which is our acreage south of the lake.
“Roughly about 25 percent of our acreage lies on the peninsula north of the lake, and 75 percent of our acreage would lie south in the Mandaree area,” he said.
Guderian said WPX expects to see some production lag in early 2014, but said it is all part of the plan.
“As you move to pad developments, we’ll be drilling three wells in succession and then completing three wells sequentially; that activity can take 90 to 100 days or so,” he said. “There will be some production lag in the beginning, and we would expect that in Q1, but it is planned and to be expected.”
The company anticipates it will see strong results by the end of the first quarter of the year.
“Current well costs are about $5.5 million, and we’re confident — we’ve only drilled 16 wells; I think we’re confident we can drive them lower,” Guderian said. “Our completion activity at our first three well pads is under way this week, and we expect those wells to deliver in early March.”
