Last week in midtown Manhattan, The Independent Petroleum Association of America hosted the 22nd annual Oil & Gas Investment Symposia. In addition to a couple of fantastic industry keynotes (one of which was presented by our own CEO Allen Gilmer), the heads of many premiere E&P companies had an opportunity to present their current investment and operational outlook to members of the investment community.Although I have a number of posts started from this event, one of the most striking themes was how excited operators are about their Permian assets.
Previously we have explored the geology of the both the Delaware and Midland Basins (in a variety of ways), examined some of the interesting qualities of the Bone Springs, looked at activity and new production capacity, checked into vertical wells, and did a fairly thorough analysis of permian rig activity just a couple of weeks ago.
I thought I would pull some of the Permian slides from a few of these presentations and take a look at the Permian from the operators’ point of view.
Lets start with WPX Energy. WPX is a fairly large independent, who has taken the opportunity of the downturn to focus their play areas (down to three from 7) and their commodity mix (now they have a 60% focus on oil and NGLs). Because of some of the divestitures, they feel pretty strong about their cash position, and are very excited about their “world-class Delaware Basin acreage.”
The company has around 94,000 acres in the thick part of the Wolfcamp, and are estimating 1.1+ billion barrels of equivalent net resource potential in the position. A closer look at their geological analysis
reveals an expectation of ~1000 MBOE Average EURs from some of their newer lower Wolfcamp A wells. As demand catches up to supply, it’s easy to see why they’re excited about the acreage.
Cimarex Energy Co.
Cimarex is an even larger operator in the Delaware Basin, with ~230,000 acres in “the fairway.” Like most operators they are excited about long term potential, and in the near term are focusing on getting more bang for their bucks. For example, in Culberson County their 7500ft Upper Wolfcamp laterals are showing impressive improvements in 30 day peak IPs, as are their 10,000ft Lower Wolfcamp laterals.
Pioneer Natural Resources
Pioneer was a major player in the ramp up of the Eagle Ford, first in line to export condensate overseas, and have been operating in west Texas since the late 80s. They are showing great projected improvements in their type curves for the Wolfcamp B.
They do plan to reduce their rig count in the play down to 12 over the course of this year, but still have an aggressive plan in place:
Callon Petroleum Company
Callon, a pure-play 100,000+ acre operator in the Permian overall, has located over ten years of drilling inventory in the Spraberry. They have been experimenting with a Chevron Pattern for optimal density.
Resolute Energy are a smaller cap than some of the other players that we have looked at, but do have an 87% liquids mix, and some attractive core acreage. They had one of my favorite slides (although it is a bit of an eye chart) that shows their acreage in Reeves county and gives some context as to their local peers’ performance as well.
Matador Resources Company
Matador, who have used the time since their 2012 IPO to expand smartly into the Wolfcamp, currently hold around 87,000 acres in the Delaware. Another eyechart slide, but jam-packed with information about their position and test results.
Despite the overall down state of US Onshore E&P operations, the Permian basin continues to have a surprisingly active and innovative amount of smart players (and smart money) sharpening their pencils.
What do you think? Leave a comment below.
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