WPX Energy to increase Williston basin activity

TULSA, Oklahoma -- WPX Energy plans to increase its activity in the Williston basin during the second half of 2015 by resuming completions and increasing its rig count from one to three before year-end.

The decision follows significant process improvements, structural changes to lower costs, successful discussions with key vendors, a technical analysis of WPX’s well performance that led to higher estimated ultimate recoveries (EURs) and favorable results from larger stimulations.

WPX has rapidly driven costs out of its Williston operations. The company’s estimated drilling and completion costs in the basin are approaching $8 million per well with 6 million pound completions, representing a decrease of more than 30% vs. its average in 2014.

The company is now recognizing a blended type curve of approximately 750 Mboe for its wells in the Middle Bakken and Three Forks formations, up 25% per well from previous estimates of 600 Mboe. This is based on historical well performance and the success of incremental completion changes WPX performed in late 2014.

“The combination of cost reductions and higher EURs gives us the opportunity to generate returns in excess of 30% in today’s commodity price environment,” said Rick Muncrief, president and CEO.

“This helps set us up for 20% oil volume growth in 2016. We’re realizing the value we have on this acreage to a fuller extent through technical excellence, improving the way we develop the asset, and looking at the operations through a new lens,” Muncrief added.

WPX has more than 85,000 net acres in the core of the Williston basin and reported proved reserves of 119 MMboe for its Williston operations at year-end 2014.

The company currently has an inventory of 14 Williston wells awaiting completion. This work is scheduled to resume in August, starting with a four-well pad.

WPX is scheduled to test 10-million-pound stimulations with more stages, more entry points and a higher pump rate in the second half of 2015 using 100% sand on its Williston wells. The company previously used a combination of sand and ceramic proppant.

WPX’s completion modifications include moving toward a higher intensity slick-water design targeting the potential to increase initial production rates and EURs even further.

“Increasing the stimulation size is about pursuing additional upside for our EURs. The collaboration we’re seeing from service providers makes this the perfect time to proceed,” Muncrief added.

The company estimates $9 million drilling and completion costs per well to perform the larger 10-million-pound stimulations.

WPX currently has one rig deployed on its Williston acreage. The company plans to go with a second rig in August and a third in November.

Funding for additional Williston activity primarily is derived by redeploying cost savings the company is incurring and reallocating capital from its Piceance basin operations to its Williston development.

WPX plans to move to a one-rig program in the Piceance during the second half of the year and evaluate the extent of Piceance-related completions based on commodity prices.