ENPNewswire-May 27, 2019--Chaparral Energy, Inc. - STACK and SCOOP Push Mid-Continent Energy to New Heights
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Release date- 24052019 - At 40,000 feet thick in its deepest portion, the Anadarko Basin in western Oklahoma presents one of the premier shale targets in North America.
Newfield Exploration Co. opened the STACK (Sooner Trend Anadarko Canadian Kingfisher) play in 2013, shortly after Continental Resources Inc. announced its SCOOP (South Central Oklahoma Oil Province) discovery well in October 2012. Those two discoveries led to horizontal drilling and remarkable growth in Oklahoma oil production and reserves.
In fact, the U.S. Energy Information Administration estimates Oklahoma's recoverable resource base had grown to 1.917 billion barrels by year-end 2017, more than double what it was only five years earlier, prior to the discovery of SCOOP and STACK.
Now, an acquisition that brings with it a new completion strategy for the STACK and an aggressive new project in the SCOOP appears certain to make those numbers increase even more. Encana Corporation finalized its acquisition of Newfield in February. Steve Campbell, who previously served as senior vice president of Newfield, has changed companies, but not jobs, taking over as senior vice president of investor relations and communications for Encana.
'The company got a lot bigger,' he remarks. 'We are close to being a 600,000 barrel-a-day company. We are by far the largest oil producer in Oklahoma.' The acquisition of Newfield means Encana now has 365,000 acres in the Anadarko Basin, about 265,000 of which are in the STACK and another 90,000 acres are in the SCOOP.
Newfield's average production during fourth quarter 2018 was more than 200,000 barrels of oil equivalent a day, including more than 125,000 bbl/d of liquids. On a pro forma basis, Encana's and Newfield's combined 2018 production would have averaged more than 555,000 boe/d, including approximately 290,000 bbl/d of liquids.
'The rationale for the acquisition was to create scale across multiple basins and to be able to leverage our vendors and operations to improve returns,' explains Campbell. 'Rocks don't know state or country boundaries, and everything is replicable from one basin to another. Encana is applying what it learned in the Permian Basin to the STACK.'
He says Newfield's wells previously cost about $7.9 million each, but Encana has set a target of reducing that by more than $1.0 million a well, which Campbell says he is confident will be attained this year.
From using locally-mined and self-sourced sand, which lowers transportation costs, to a change in the workflow at the job site, and lowering cycle and drilling times, he says, Encana has put its focus on reducing the time between first investment and first return.
Encana is cutting back the number of rigs it is operating in the STACK, but because of the improvement in cycle time, it expects to complete nearly the same number of wells this year, Campbell says. It plans to go from the 11 rigs Newfield was running to four rigs by May, he says, but still will put about 100 wells on line in 2019. He adds that the company will go from four completion spreads to running two continuously.
He reports Encana is bringing cube drilling, which it has employed in the Permian and Montney basins, to the STACK, which is a new practice for Oklahoma. Encana is drilling 10,000-foot super extended laterals, similar to what Newfield was drilling. But instead of drilling wells in a row, it is drilling six-eight wells a section in a cube.
'Cubes and row drilling are distinctly different,' Campbell emphasizes. 'With two-mile laterals, you could have six miles of activity. With cube drilling, you drill one or two cubes and then come back in 12-24 months. By doing that, we are reducing cycle times from 180 days or more to 90. We are producing revenue more...