Permian Basin 2017

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PERMIAN BASIN: OVERVIEW 6 | November 2017 | section, we can get a full 5,000-ft lateral, while in some of our early generation wells we were getting only 4,200 ft," he said. In recently closed deals RSP Permian Inc. added 6,000 mostly contiguous net acres and 4,500 net royalty acres in the Delaware Basin in Loving and Winkler counties for about $228 million in August. RSP CEO Steven Gray said the acquisitions further block up contiguous positions while offering addi- tional length to lateral wells. In its second-quarter report on Aug. 7, Gray said, "As we consider our operating strategy and plans going into 2018, we will look to closely balance our capital spending with our cash fl ow generation while remaining fl exible to adjust our activity levels to market conditions. We have the capability to continue to grow our annual production volumes on a double-digit basis within cash fl ow at oil prices below $50 per barrel." During the second quarter, RSP operated four horizontal rigs in the Midland Basin and two rigs in the Delaware Basin. The company added a third horizontal rig in the Delaware in May. RSP expected to drill 52 to 56 wells and complete 48 to 53 wells in second-half 2017. The company also expected to end the year with 21 to 30 drilled but uncompleted wells (DUCs). RSP utilized one full-time completion crew in the Midland Basin and a nearly full-time crew in the Delaware Basin. RSP drilled 22 operated hor- izontal wells and completed 18 operated horizon- tal wells. The company began the quarter with 18 operated horizontal DUCs and exited the quarter with 22 DUCs. Parsley Energy is another company that is look- ing to fi ll the holes in its land puzzle. On April 20 Parsley said it closed its acquisition of 71,000 unde- veloped and producing properties in the Midland Basin from Double Eagle Energy Permian LLC and some of its affi liates for about $2.8 billion. Parsley expected to complete 25 to 35 gross oper- ated horizontal wells in second-quarter 2017, 35 to 45 completions in the third quarter and 40 to 50 completions in the fourth quarter, generating sub- stantial production momentum through the end of the year and beyond. Over the remainder of 2017, the company expected to drill about 30 wells on acreage acquired from Double Eagle with pads located in Midland, Martin, Howard and Glasscock counties. Following the recent acquisitions, Parsley said it has more than 900 Wolfcamp C drilling locations in what it identifi ed as the fairway of the Wolfcamp C play in portions of Reagan, Glasscock, Midland and Upton counties. In Pecos County, its long-lateral wells are keeping pace with its shorter lateral wells on a length-nor- malized basis, bolstering the capital effi ciency of Parsley's Southern Delaware development program. Noncore assets for sale It isn't often that Permian Basin assets are described as noncore. In 2011 BHP Billiton invested more than $20 billion in U.S. shales, A worker climbs up the rig in the North McElroy Unit in Crane, Texas. (Photo courtesy of Apache Corp.)

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