Permian Basin 2017

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PERMIAN BASIN: OVERVIEW | November 2017 | 5 "During the second quarter of 2017 we made significant progress in the Permian Basin by increasing drilling activity on our Mustang Springs asset and aggressively developing our County Line asset, resulting in record net equivalent produc- tion in the Permian Basin of 21,200 boe/d," said Chuck Stan- ley, QEP's chairman, president and CEO. "We announced agreements to sell all of our Pinedale assets and other southwest Wyoming gas assets for a total of $777.5 million, which combined with an agreement to acquire approx- imately 13,800 additional net acres in the core of the northern Midland Basin, [and] continue our pivot toward a more oil-focused portfolio. We expect to fund the Permian Basin acquisition with proceeds from our Pinedale asset sale and with cash on hand." He added, "The acquisition will significantly expand our Permian Basin net acreage by almost 50% and our potential drilling inventory by over 60% to nearly 1,900 potential horizontal drilling locations in the core of the northern Midland Basin." Halcón Resources is another company that sold other assets to boost its presence in the Permian. "The sale of our Williston Basin operated assets transforms Halcón into a single-basin company focused on the Delaware Basin where we have more than 41,000 net acres in Ward and Pecos counties representing decades of highly economic drilling inventory," said Floyd Wilson, Halcón's chairman, CEO and president, in a July 11 statement. The Pinedale-operated assets were sold to an affiliate of Bruin E&P Partners, a portfolio com- pany of Arclight Capital Partners, for $1.4 billion in cash. The company plans to continue to run two rigs in the Delaware Basin for the remainder of 2017 and currently expects to exit 2017 with production in excess of 13,000 boe/d net. Apache Corp. is another company moving around pieces to its puzzle. The company sold its assets in Canada for $713 million, according to a July 17 press release. The move "is consistent with Apache's objective of streamlining our portfolio and focusing on assets in the United States, United Kingdom North Sea and Egypt. This strategic deci- sion will enhance the company's resource alloca- tion to its primary growth areas, particularly within the Permian Basin," said John J. Christmann IV, Apache's CEO and president. Bolt-on acquisitions allow longer laterals The pieces to the Permian puzzle are requiring trading strips of land to get longer laterals and thus increase production. Operators in the Perm- ian Basin have begun swapping small strips of land on adjoining acreage owned by other compa- nies to build their pads so that they can maximize their laterals. On the CBP Lance Taylor, president and CEO of Steward Energy, explained that field rules allow a company to complete and produce a horizon- tal well at 100 ft off the heel and 100 ft off the toe. "Ideally we start from a surface location off the lease to be produced, and we get an exception from the operator of that adjacent section. We can really maximize our lateral lengths. In a 1-mile Fewer rigs were stacked in the Helmerich & Payne yard in the Midland area on May 21. (Photo by Scott Weeden)

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