American Oil and Gas Reporter - September 2016 - 70

SpecialReport: Horizontal & Innovative Drilling

Devon Energy began operations at its Big Sand Draw carbon dioxide facility in June
2015. Anticipated production of 3,000 barrels a day during the first half of 2016 is expected to peak at 5,000 bbl/d in early 2017. Devon has a 98 percent working interest
and a 75 percent net revenue interest in the Big Sand Draw project.

actions to divest approximately 3,700 net
undeveloped acres and 107 vertical wells,
primarily in Adams County, Co.
Extended-Reach Laterals
Denver-based Bill Barrett Corporation has 59,500 net acres in the DJ Basin
that it acquired in transactions in 2011 and

70 THE AMERICAN OIL & GAS REPORTER

2012, of which approximately 50,000
are located in the Northeast Wattenberg
Field in Weld County.
Senior Director of Investor Relations
Larry Busnardo says Bill Barrett has
been focusing on laterals of 9,500 feet over
the last two years, which he says have
demonstrated significant improvement

and better relative economics, compared
with shorter-lateral wells.
"Because our acreage is contiguous, we
have 920 more feet we can drill (with extended-reach laterals) because there are no
setbacks for lease lines," explains William
K. Stenzel, senior vice president of corporate development and planning. "But it is
more than that. We have cut drilling and
completion costs by 20 percent from second half 2015 levels, and we are getting
about twice the production per well."
He says Bill Barrett initially was
drilling laterals of about 4,200 feet when
it started its horizontal development of the
Niobrara and Codell formations. It now has
drilled 70-80 extended-reach lateral wells.
Stenzel contends some of the company's cost reductions have come just from
being more efficient. For example, he says
Bill Barrett can drill a 9,500-foot horizontal well in 7-9 days, about the same time
it takes others to drill a 4,200-foot lateral. He points out that Bill Barrett also has
locked in on a completion style.
"We prefer 55 frac stages for a 9,500foot lateral," he details. "We are using plugand-perf, which allows for more efficient
along-the-lateral stimulation. There are
three entry points per stage, so there are 150
entry points along the lateral. That is a more
efficient way to optimize drainage of the
wellbore. We are using 1,000 pounds per
foot of proppant, although we see potential for higher sand concentrations."
Stenzel comments that not all oil sales
are created equal. For example, he says Bill
Barrett currently receives a $4-$5 differential from West Texas Intermediate spot
prices, but some companies have certain
volume commitments at more than a $9$10 differential to WTI.
The company's production averages 65
percent crude oil, 20 percent natural gas,
and 15 percent NGLs, according to Busnardo. "That gives us a financial boost because we have more oil than other parts of
the Wattenberg Field," he states.
Busnardo also mentions that take-away
capacity is not a problem. In fact, he says
the Grand Mesa Saddlehorn Pipeline coming on line will add more than 300,000 bbl/d
capacity to the region. He adds that Saddlehorn will have lower line pressure, so
wells don't have to produce at as high a rate.


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Table of Contents for the Digital Edition of American Oil and Gas Reporter - September 2016

Contents
American Oil and Gas Reporter - September 2016 - Cover1
American Oil and Gas Reporter - September 2016 - Cover2
American Oil and Gas Reporter - September 2016 - Contents
American Oil and Gas Reporter - September 2016 - 4
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American Oil and Gas Reporter - September 2016 - Cover3
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