American Oil and Gas Reporter - June 2015 - 54

SpecialReport: Permian Basin Update
Untapped Potential
Kinder Morgan's ongoing work
demonstrates the untapped upside in even
the most mature CO2 flood projects in Permian Basin, Schoeling holds.
"This is getting bigger and better than
I thought it ever could be," he admits.
"Three or four years ago, I would have said
SACROC production would probably be
slowing, but it has been the opposite. We
have a lot of life left in this field."
Last year, Kinder Morgan drilled 41
wells at SACROC, but 48 are planned this
year, Schoeling announces, including infill and horizontal wells, and other additions to existing patterns.
At Kinder Morgan's Katz Field northeast of SACROC, the number of five-spot
patterns has grown from 25 one year ago
to 68 today, and seven additional patterns
are expected to be added this year, Schoeling adds.
Kinder Morgan also has a pilot project
under way to boost yields from the 26,423acre Yates Field in southeastern Pecos
County, which utilizes gas-assisted gravity drainage. With 5.4 billion barrels of
original oil in place, the Yates Field produced 19,300 bbl/d last year, but Schoeling says the pilot project, which includes
injecting natural gas liquids to mobilize 1.5
billion barrels of oil in the gas cap, is expected to increase that average and extend
the field's life.
Another pilot is under way at the company's Tall Cotton Field to boost production from the San Andres by tapping into
previously undrilled residual oil zones,
Schoeling continues. Carbon dioxide injections started in a nine-well pattern program

in November, and the company saw first
oil in early May, he reports. If the project
is successful, long-range plans call for additional phases of development, he adds.
"Continued success in the pilot would
make Tall Cotton a significant addition to
Kinder Morgan's EOR portfolio," Schoeling says. "It still is in the testing stage, but
you can tell we are not slowing a bit."

Basin Newcomer
Executives at Encana Corp. have said
they believe the Permian Basin's
unconventional production potential
ultimately will exceed that of the Eagle
Ford and the Bakken combined, and the
company is putting its capital where its
expectations are.
Encana closed on an acquisition of
Athlon Energy Inc. in November, marking
its entry into the basin, points out Randy
Frederick, senior manager for Permian development.
Equipped by success in other North
American resource plays, the company this
year is marking its launch with a $1
billion capital budget to assess acreage,
drill vertically to hold leases, and drill
horizontally from multiwell pads to tap
targeted stacked pays that include
Wolfcamp and Spraberry prospects as it
delineates its new Midland Basin holdings,
Frederick says.
He says the purchase added 32,000
boe/d of production, 140,000 net acres, the
potential for 5,000 horizontal well
locations, and recoverable resources
estimated at 3 billion boe. "We are working to identify the potential of stacked pay
acreage and develop exploitation strategies

Anadarko Petroleum Corp.'s delineation efforts on its 610,000 Permian Basin acres
prospective to the Wolfcamp Shale have established a resource estimate of more than
1 billion barrels of oil equivalent and 5,000 drilling locations. The company was producing 26,000 boe a day in the first quarter.

54 THE AMERICAN OIL & GAS REPORTER

for the long term," reports Frederick.
He says Encana's efforts have benefited from data acquired from other operators, and from vertical optimization wells
that allow it to examine potential targets.
This year, Frederick reports, the company is conducting two drilling programs
on its Permian acreage in Martin, Midland,
Glasscock and Howard counties. He says
Encana expects to drill 123 vertical wells,
including numerous wells to help meet
lease retention obligations.
The company's horizontal rig fleet includes four out of six that are fit-for-purpose for multipad drilling, Frederick observes. He says Encana plans 61 horizontal wells this year.
"We are active in all four counties, and
are drilling multiwell pads, with the exception of maybe a couple wells," he outlines.
Encana already has done larger completions that include longer laterals with higher proppant and fluid volumes through
tighter cluster spacing to identify the potential of its acreage, he says. "We would like
to get a feel for where the edge is before we
invest a lot more money," Frederick states.

Key Asset
The Wolfcamp Shale remains a key asset that Anadarko Petroleum Corp. says it
expects to drive significant production
growth over the next one to three years as
the company focuses on transitioning to
pad activity and building infrastructure
across its position in the Delaware Basin.
Anadarko saw average daily production
of 26,000 boe during the first quarter, including almost 18,000 barrels of liquids a
day, but there is much more to produce, the
company announced during its first-quarter earnings call.
It says delineation efforts on the Wolfcamp Shale beneath its 610,000 gross acres
have established a net resource estimate of
more than 1 billion boe, and have identified more than 5,000 drilling locations in
the heart of the play.
Meanwhile, Anadarko's operations report says the company continues to bring
new Wolfcamp production on line, including 19 wells in the first quarter. Anadarko
spudded 17 Wolfcamp wells, and several underwent additional testing on development options for the Wolfcamp A
bench. The company is assessing staggered
targeting, well spacing, and extended lateral lengths, the report states.
The company reduced its rig count from
10 at the first of the year to six by the end
of March, but continues to aggressively ex-

American Oil and Gas Reporter - June 2015

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