Permian Basin 2017

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PERMIAN BASIN: KEY PLAYERS 24 | November 2017 | acres in the northern Midland Basin. On the east- ern shelf of the Midland Basin, the company also holds 52,000 net acres in the Spade Ranch property located in Mitchell County, Texas. In 2015 the company initiated its horizontal program, which has generated strong economic returns. The company has stated they have a signif- icant inventory of horizontal drilling locations in the Midland Basin, particularly targeting the Wolf- camp and Spraberry zones. From 2007 through 2016, the company drilled more than 1,000 gross vertical wells in the Midland Basin. The company has spent 2016 and 2017 accelerating its horizontal activity, which includes testing optimum vertical and lateral spacing for full horizontal development. The company is currently running three horizontal drilling rigs. According to a news article by, "CrownQuest Operating LLC, a Midland, Tex- as-based private operator with some ties to Lime Rock Partners, is among the list of frequently men- tioned potential targets [for a merger/acquisition deal]. One source noted the company is among the few remaining privately held operators with a sig- nificant Midland Basin acreage position." Devon Energy Devon's operations in the Delaware Basin of West Texas and southeast New Mexico cover about 10,000 sq miles. The company's drilling focus is in the oil-rich Bone Spring as well as in the Delaware, Wolfcamp and Leonard formations. Devon reported year-end 2016 production of 60 Mboe/d (74% liquids), reserves of 108 MMboe (75% liquids) and drilled 58 gross wells, the company stated on its website. In a comparison of volumes from 2016 vs. 2015, "Delaware Basin production was relatively flat as natural declines offset the increases from new wells," Devon stated in its 2016 annual report. Of the 126 MMBoe of extensions and discoveries the company made in 2016, 18 MMboe related to the Delaware Basin. The company's 2017 E&P capital investment for the Delaware Basin is $700 million. The company plans to "steadily ramp up activity with as many as 10 operated rigs running by the end of the year, primarily focused on the Bone Spring, Leonard and Wolfcamp formations," the report stated. Diamondback Energy Inc. Diamondback Energy is an independent oil and natural gas company headquartered in Midland, Texas. It operates in the Permian Basin in West Texas with activities primarily focused on the hori- zontal exploitation of multiple intervals within the Wolfcamp, Spraberry, Clearfork, Bone Spring and Cline formations. The company has about 191,000 net surface acres in the Permian (about 87,000 in the northern Midland Basin and about 104,000 in the southern Delaware Basin) with about 4,300 gross locations and is operating nine high-specification rigs (six Midland, three Delaware), according to an August investor presentation. The company added its ninth operated rig in May and expects to maintain eight to nine rigs at current commodity prices. Diamondback's 2017 capex investment is $800 million to $950 million. The company expects to complete 115 to 135 gross horizontal wells with an average lateral length of about 8,500 ft in 2017, according to the presentation. Horizontal drilling rigs are working on Diamondback- operated acreage in the Northern Midland Basin. (Photo courtesy of Diamondback Energy)

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