Permian Basin 2017

Issue link:

Contents of this Issue


Page 9 of 91

PERMIAN BASIN: OVERVIEW 8 | November 2017 | including about $15 billion for Petrohawk. Now that same acreage is up for sale at what is expected to be considerably less than the original invest- ment. The bidding will likely be brisk for BHP Billiton's U.S. shale acreage. At BHP Billiton's fi scal year-end meeting on Aug. 22, CEO Andrew Mackenzie stated, "As I have said previously, the shale acquisitions were poorly timed, we paid too much and the rapid pace of early development was not optimal. "When we entered the industry our objective was to leverage our systems and scale, become an industry leader and then replicate the opportunity around the world. However, following a global endowment study, it became apparent that oppor- tunities to replicate U.S. shale oil elsewhere did not exist. This sharpened focus informed our regular portfolio review, and we have now concluded that these assets are noncore." BHP Billiton's Permian operation is located pri- marily in western Reeves County and consists of about 93,000 net acres. The company produces oil, condensate, gas and NGL. However, the company is focused on maximiz- ing the value of its onshore assets. In the Permian two additional rigs were to begin drilling in the September quarter with focus on completion trials, which will inform a transition to full-pad develop- ment as early as the 2019 fi nancial year. BHP Billiton is not the only major avoiding unconventional shale plays. Total labeled shale assets as expensive and noted that shale develop- ment was not high on its list of expertise. Full speed ahead EOG Resources probably has more pieces to its Permian puzzle than just about any com- pany. From one side of the Permian Basin to the other, EOG is moving at full speed with its development program. "EOG can generate high returns at relatively low oil prices, and our disciplined investment strategy has positioned the company on a strong fi nancial footing," Bill Thomas, EOG chairman and CEO, said. "By applying industry-leading technology and geoscience to our acreage concen- trated in the sweet spots of the largest oil plays in the U.S., EOG can continue to grow at strong rates within cash fl ow." The company increased its 2017 production growth targets to 7% from 5% while maintaining its current plan of completing 480 net wells with capex of $3.7 billion to $4.1 billion. EOG is actively engaged in an exploration program to lease and test multiple new prospects, including the Permian Northwest Shelf in New Mexico in 2017. The company has 346,000 net acres in the Del- aware Basin Wolfcamp with 2,660 net wells. It is testing 500-ft spacing and additional targets. For the Second Bone Spring it has 289,000 net acres and 1,870 wells. For the Leonard Shale, EOG has 160,000 net acres and 1,800 net wells with 660-ft spacing in the "A" and "B" zones. According to its company report, in second-quar- ter 2017 EOG completed 25 wells in the Delaware Basin Wolfcamp with an average treated lateral length of 6,500 ft per well and average 30-day IP rates per well of 3,010 boe/d. In Lea County, N.M., EOG completed a four-well pattern with an average lateral length of 6,700 ft/well and average 30-day IP rate per well of 3,870 boe/d. In the Bone Spring EOG completed 19 wells with an average treated lateral length of 5,600 ft/ well and average 30-day IP rate per well of 2,130 boe/d. In Lea County EOG also completed a three- well pattern in the Bone Spring with an average treated lateral of 9,700 ft and average 30-day IP rate per well of 3,620 boe/d. A worker moves to the top of storage tanks near the San Andres Field in the Permian Basin. (Photo courtesy of Apache Corp.)

Articles in this issue

Links on this page

Archives of this issue

view archives of Playbooks - Permian Basin 2017