Newfield Exploration held it’s 3Q2010 Earnings Call on the 21st and highlighted some interesting points about the Granite Wash and their program.
First of all, the Granite Wash is their 3rd highest ROR play behind the Monument Butte and the Williston Basin. Specifically, the Marmaton Granite Wash. The liquids rich Marmaton has a 50%-60% pre-tax ROR. Newfield said the Atoka Granite Wash is next. I’ll post a slide I found helpful from an earlier Linn Energy presentation showing the different horizons in the Granite Wash to get an idea of the scale.
The Atoka is dry gas but still offers nice RORs according to Newfield. The shallower formations are the more liquids’y ones.
Newfield is sitting on 46,000 acres with 250+ drilling locations, more if they prove up the Marmaton on more of their acreage. In fact, that number could potentially double or triple depending on the multiple horizons. They are running 4 rigs and it shouldn’t dip below 3 next year. Newfield expects 200-250 acre spacing when all is said and done in the Marmaton. They estimate a 10-15% increase in total well costs in 2011, due to service cost increases.
Here is a slide from an October Newfield presentation.
The Granite Wash is certainly becoming more attractive as certain operators scale back on their natural gas programs waiting for prices to bounce back. At 50% BTROR, no doubt it is outperforming dry gas areas such as the Woodford. Keep checking this blog for more things Granite Wash.