American Oil & Gas Reporter - December 2011 - 62

SpecialReport: Permian Basin Activity Update
inch hole and inject over 10-40 acres. A lot of old assumptions that were relevant at the time have been proven to be too conservative or flat-out wrong.” Apache signed a 20-year CO2 supply contract last year to develop approximately 8.4 million boe of estimated proved reserves at its Roberts Unit. The company drilled 15 production and injection wells that resulted in higher-than-predicted production rates last year. It continued that CO2 development at the Roberts Unit this year with 43 new production and injection wells, Christmann reports. By the time 2011 ends, Apache expects to have drilled 600 wells in the Permian Basin, 45 of which are horizontals. Christmann says he expects that number to increase to 700 total wells with 100 horizontals in 2012. He adds that while Apache has not yet drilled a Bone Spring well in Texas, the company has been acquiring acreage and he says he expects that to happen next year. Takeaway capacity also is an important component in an expanding area such as the Permian Basin, Christmann observes. “We not only are producing 91,000 boe/d but we also are moving more than 1 million barrels of water every day,” he states. “We also have to treat our natural gas liquids, so the Permian Basin is in an infrastructure buildup mode now.” Even though the basin has existing infrastructure, much of it needs to be increased. More of the drilling today is offset or on the flanks of where traditional drilling activity has been located, according to Christmann, which also requires more infrastructure to be built to areas with new activity. ‘Three-Legged Stool’ Acquisitions also are how Concho Resources has expanded from a startup company in 2004 that made its initial public offering in 2007, to where it now has grown to be the sixth-largest oil producer in the Permian Basin and largest oil producer in New Mexico. The Midland, Tx.-headquartered company acquired the oil and gas assets of the Mack Chase family in Artesia, N.M., in 2006, most of which was in the Yeso play on the New Mexico Shelf. It then acquired Henry Petroleum’s Wolfberry assets in 2008 and purchased Marbob’s

Concho Resources Inc. has kept 36 rigs running this year in the Permian Basin, with 12 rigs operating in the Yeso, six in the Bone Spring, one drilling horizontally in the Abo play in New Mexico, and 17 in the Wolfberry play. As a group, Concho’s employees have drilled more than 1,000 Wolfberry wells, including this new producing well.

Permian Basin, 11 of which are in its Deadwood play, which is what it calls its Wolfcamp operations in Glasscock County, according to Christmann. “We have made great strides in cutting total well costs by reducing our drilling days,” he adds. “Optimizing on the cost side has a significant impact on the overall profitability of these wells.” He says Mariner was using two strings of pipe in the Wolfcamp play. After the merger, Apache moved in and begin using three strings of pipe, yet still halved the number of days required to drill a well to total depth, according to Christmann. How did Apache do it? “Repetition and focus,” he responds. “We did it with bit technology, mud technology and really focusing on optimizing the efficiency of all aspects of our operations.” Yeso Play Apache also has three rigs running in the Yeso play, a large play area on the New Mexico Shelf in which it has partnered with Concho Resources. Christmann calls the Yeso the “Clearfork equivalent in New Mexico.” Apache recently bought
62 THE AMERICAN OIL & GAS REPORTER

the Empire Abo Unit that added to its production in New Mexico. “There is a lot of running room, and I expect we will ramp up in 2013 in that area,” he says of the Yeso play, noting that Apache is drilling both vertical and horizontal Yeso wells. The company’s other 10 rigs are scattered across the basin in a variety of plays, according to Christmann, including a couple in the Eunice area in southeastern New Mexico that are exploring the Abo and Blinebry formations. “We have 20-acre and 10-acre infill wells that we will be doing for years,” he adds. Apache also is drilling horizontal wells in four mature waterflood fields: the North McElroy, Shafter Lake, TXL South and Dean Units on the Central Basin Platform. Horizontal drilling, coupled with waterfloods, has proven to be a commercial success. Christmann calls that combination just another example of how technology has allowed increased production in areas previously believed to be uneconomical. “Petroleum engineering is the only engineering field that is based on a very small sample,” he says. “You drill a 5.0-



Table of Contents for the Digital Edition of American Oil & Gas Reporter - December 2011

American Oil and Gas Reporter 12/11
Contents
Reports
Calendar
Oil & Gas Counts
State Legislative
Industry Digest
Tech Connections
Washington Watch
Keystone XL
Liaison Committee
Shale Gas Subcommittee
Endangered Species
Midstream Startups Emerging to Meet Booming Demand
Liquids Resource Plays Have Oil Production Rising Again
Organizers Anticipating Big Things for 2012 PBIOS
Cover Story
R&D Areas Key to Improving Fracturing
Natural Gas Offers Solutions as Transportation Fuel
Completion Design, Frac Modeling Optimize Eagle Ford Wells
Novel Drill-In Fluid Excels in Horizontal ERD Wells
Technologies Optimize Sand Control
Operators Must Manage Risk Before, During and After Drilling
OCS Access: BOEM Offers Business-as-Usual OCS Leasing Plan
Court Finds for Insurers in Gulf Spill Ruling
OIPA
Clean Air Act
IOGA NY
COGA
IPAA Annual
Louisiana
West Virginia
Pennsylvania
Texas
The American Well Servicing Directory, Winter 2011
Industry Focus
Classified Advertising
Advertisers Index
American Oil & Gas Reporter - December 2011 - American Oil and Gas Reporter 12/11
American Oil & Gas Reporter - December 2011 - Cover2
American Oil & Gas Reporter - December 2011 - Contents
American Oil & Gas Reporter - December 2011 - Reports
American Oil & Gas Reporter - December 2011 - 5
American Oil & Gas Reporter - December 2011 - 6
American Oil & Gas Reporter - December 2011 - 7
American Oil & Gas Reporter - December 2011 - Calendar
American Oil & Gas Reporter - December 2011 - 9
American Oil & Gas Reporter - December 2011 - 10
American Oil & Gas Reporter - December 2011 - 11
American Oil & Gas Reporter - December 2011 - Oil & Gas Counts
American Oil & Gas Reporter - December 2011 - 13
American Oil & Gas Reporter - December 2011 - Industry Digest
American Oil & Gas Reporter - December 2011 - 15
American Oil & Gas Reporter - December 2011 - 16
American Oil & Gas Reporter - December 2011 - 17
American Oil & Gas Reporter - December 2011 - 18
American Oil & Gas Reporter - December 2011 - 19
American Oil & Gas Reporter - December 2011 - 20
American Oil & Gas Reporter - December 2011 - 21
American Oil & Gas Reporter - December 2011 - 22
American Oil & Gas Reporter - December 2011 - 23
American Oil & Gas Reporter - December 2011 - 24
American Oil & Gas Reporter - December 2011 - 25
American Oil & Gas Reporter - December 2011 - 26
American Oil & Gas Reporter - December 2011 - 27
American Oil & Gas Reporter - December 2011 - 28
American Oil & Gas Reporter - December 2011 - Tech Connections
American Oil & Gas Reporter - December 2011 - 30
American Oil & Gas Reporter - December 2011 - Washington Watch
American Oil & Gas Reporter - December 2011 - Keystone XL
American Oil & Gas Reporter - December 2011 - 33
American Oil & Gas Reporter - December 2011 - Liaison Committee
American Oil & Gas Reporter - December 2011 - 35
American Oil & Gas Reporter - December 2011 - 36
American Oil & Gas Reporter - December 2011 - 37
American Oil & Gas Reporter - December 2011 - Shale Gas Subcommittee
American Oil & Gas Reporter - December 2011 - 39
American Oil & Gas Reporter - December 2011 - Endangered Species
American Oil & Gas Reporter - December 2011 - 41
American Oil & Gas Reporter - December 2011 - Midstream Startups Emerging to Meet Booming Demand
American Oil & Gas Reporter - December 2011 - 43
American Oil & Gas Reporter - December 2011 - 44
American Oil & Gas Reporter - December 2011 - 45
American Oil & Gas Reporter - December 2011 - 46
American Oil & Gas Reporter - December 2011 - 47
American Oil & Gas Reporter - December 2011 - 48
American Oil & Gas Reporter - December 2011 - 49
American Oil & Gas Reporter - December 2011 - 50
American Oil & Gas Reporter - December 2011 - 51
American Oil & Gas Reporter - December 2011 - 52
American Oil & Gas Reporter - December 2011 - 53
American Oil & Gas Reporter - December 2011 - 54
American Oil & Gas Reporter - December 2011 - 55
American Oil & Gas Reporter - December 2011 - 56
American Oil & Gas Reporter - December 2011 - 57
American Oil & Gas Reporter - December 2011 - Liquids Resource Plays Have Oil Production Rising Again
American Oil & Gas Reporter - December 2011 - 59
American Oil & Gas Reporter - December 2011 - 60
American Oil & Gas Reporter - December 2011 - 61
American Oil & Gas Reporter - December 2011 - 62
American Oil & Gas Reporter - December 2011 - 63
American Oil & Gas Reporter - December 2011 - 64
American Oil & Gas Reporter - December 2011 - 65
American Oil & Gas Reporter - December 2011 - 66
American Oil & Gas Reporter - December 2011 - 67
American Oil & Gas Reporter - December 2011 - 68
American Oil & Gas Reporter - December 2011 - 69
American Oil & Gas Reporter - December 2011 - 70
American Oil & Gas Reporter - December 2011 - 71
American Oil & Gas Reporter - December 2011 - 72
American Oil & Gas Reporter - December 2011 - Organizers Anticipating Big Things for 2012 PBIOS
American Oil & Gas Reporter - December 2011 - Cover Story
American Oil & Gas Reporter - December 2011 - 75
American Oil & Gas Reporter - December 2011 - 76
American Oil & Gas Reporter - December 2011 - 77
American Oil & Gas Reporter - December 2011 - 78
American Oil & Gas Reporter - December 2011 - 79
American Oil & Gas Reporter - December 2011 - 80
American Oil & Gas Reporter - December 2011 - 81
American Oil & Gas Reporter - December 2011 - 82
American Oil & Gas Reporter - December 2011 - R&D Areas Key to Improving Fracturing
American Oil & Gas Reporter - December 2011 - 84
American Oil & Gas Reporter - December 2011 - 85
American Oil & Gas Reporter - December 2011 - 86
American Oil & Gas Reporter - December 2011 - 87
American Oil & Gas Reporter - December 2011 - 88
American Oil & Gas Reporter - December 2011 - 89
American Oil & Gas Reporter - December 2011 - 90
American Oil & Gas Reporter - December 2011 - Natural Gas Offers Solutions as Transportation Fuel
American Oil & Gas Reporter - December 2011 - 92
American Oil & Gas Reporter - December 2011 - 93
American Oil & Gas Reporter - December 2011 - 94
American Oil & Gas Reporter - December 2011 - 95
American Oil & Gas Reporter - December 2011 - Completion Design, Frac Modeling Optimize Eagle Ford Wells
American Oil & Gas Reporter - December 2011 - 97
American Oil & Gas Reporter - December 2011 - 98
American Oil & Gas Reporter - December 2011 - 99
American Oil & Gas Reporter - December 2011 - 100
American Oil & Gas Reporter - December 2011 - 101
American Oil & Gas Reporter - December 2011 - 102
American Oil & Gas Reporter - December 2011 - 103
American Oil & Gas Reporter - December 2011 - 104
American Oil & Gas Reporter - December 2011 - 105
American Oil & Gas Reporter - December 2011 - 106
American Oil & Gas Reporter - December 2011 - 107
American Oil & Gas Reporter - December 2011 - 108
American Oil & Gas Reporter - December 2011 - 109
American Oil & Gas Reporter - December 2011 - 110
American Oil & Gas Reporter - December 2011 - Novel Drill-In Fluid Excels in Horizontal ERD Wells
American Oil & Gas Reporter - December 2011 - 112
American Oil & Gas Reporter - December 2011 - 113
American Oil & Gas Reporter - December 2011 - 114
American Oil & Gas Reporter - December 2011 - 115
American Oil & Gas Reporter - December 2011 - 116
American Oil & Gas Reporter - December 2011 - Technologies Optimize Sand Control
American Oil & Gas Reporter - December 2011 - 118
American Oil & Gas Reporter - December 2011 - 119
American Oil & Gas Reporter - December 2011 - 120
American Oil & Gas Reporter - December 2011 - 121
American Oil & Gas Reporter - December 2011 - Operators Must Manage Risk Before, During and After Drilling
American Oil & Gas Reporter - December 2011 - 123
American Oil & Gas Reporter - December 2011 - 124
American Oil & Gas Reporter - December 2011 - 125
American Oil & Gas Reporter - December 2011 - 126
American Oil & Gas Reporter - December 2011 - 127
American Oil & Gas Reporter - December 2011 - 128
American Oil & Gas Reporter - December 2011 - OCS Access: BOEM Offers Business-as-Usual OCS Leasing Plan
American Oil & Gas Reporter - December 2011 - Court Finds for Insurers in Gulf Spill Ruling
American Oil & Gas Reporter - December 2011 - 131
American Oil & Gas Reporter - December 2011 - 132
American Oil & Gas Reporter - December 2011 - OIPA
American Oil & Gas Reporter - December 2011 - 134
American Oil & Gas Reporter - December 2011 - 135
American Oil & Gas Reporter - December 2011 - Clean Air Act
American Oil & Gas Reporter - December 2011 - 137
American Oil & Gas Reporter - December 2011 - IOGA NY
American Oil & Gas Reporter - December 2011 - 139
American Oil & Gas Reporter - December 2011 - 140
American Oil & Gas Reporter - December 2011 - 141
American Oil & Gas Reporter - December 2011 - 142
American Oil & Gas Reporter - December 2011 - 143
American Oil & Gas Reporter - December 2011 - COGA
American Oil & Gas Reporter - December 2011 - 145
American Oil & Gas Reporter - December 2011 - 146
American Oil & Gas Reporter - December 2011 - IPAA Annual
American Oil & Gas Reporter - December 2011 - 148
American Oil & Gas Reporter - December 2011 - 149
American Oil & Gas Reporter - December 2011 - 150
American Oil & Gas Reporter - December 2011 - 151
American Oil & Gas Reporter - December 2011 - Louisiana
American Oil & Gas Reporter - December 2011 - 153
American Oil & Gas Reporter - December 2011 - 154
American Oil & Gas Reporter - December 2011 - 155
American Oil & Gas Reporter - December 2011 - West Virginia
American Oil & Gas Reporter - December 2011 - 157
American Oil & Gas Reporter - December 2011 - Pennsylvania
American Oil & Gas Reporter - December 2011 - Texas
American Oil & Gas Reporter - December 2011 - 160
American Oil & Gas Reporter - December 2011 - The American Well Servicing Directory, Winter 2011
American Oil & Gas Reporter - December 2011 - 162
American Oil & Gas Reporter - December 2011 - 163
American Oil & Gas Reporter - December 2011 - 164
American Oil & Gas Reporter - December 2011 - 165
American Oil & Gas Reporter - December 2011 - 166
American Oil & Gas Reporter - December 2011 - 167
American Oil & Gas Reporter - December 2011 - 168
American Oil & Gas Reporter - December 2011 - 169
American Oil & Gas Reporter - December 2011 - 170
American Oil & Gas Reporter - December 2011 - 171
American Oil & Gas Reporter - December 2011 - 172
American Oil & Gas Reporter - December 2011 - 173
American Oil & Gas Reporter - December 2011 - 174
American Oil & Gas Reporter - December 2011 - 175
American Oil & Gas Reporter - December 2011 - 176
American Oil & Gas Reporter - December 2011 - 177
American Oil & Gas Reporter - December 2011 - 178
American Oil & Gas Reporter - December 2011 - 179
American Oil & Gas Reporter - December 2011 - 180
American Oil & Gas Reporter - December 2011 - 181
American Oil & Gas Reporter - December 2011 - 182
American Oil & Gas Reporter - December 2011 - 183
American Oil & Gas Reporter - December 2011 - 184
American Oil & Gas Reporter - December 2011 - 185
American Oil & Gas Reporter - December 2011 - Industry Focus
American Oil & Gas Reporter - December 2011 - 187
American Oil & Gas Reporter - December 2011 - 188
American Oil & Gas Reporter - December 2011 - 189
American Oil & Gas Reporter - December 2011 - 190
American Oil & Gas Reporter - December 2011 - 191
American Oil & Gas Reporter - December 2011 - Classified Advertising
American Oil & Gas Reporter - December 2011 - 193
American Oil & Gas Reporter - December 2011 - Advertisers Index
American Oil & Gas Reporter - December 2011 - Cover3
American Oil & Gas Reporter - December 2011 - Cover4
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