American Oil and Gas Reporter - May 2016 - 74

SpecialReport: Mid-Continent Activity Profile
year: 50 in STACK and 30 in SCOOP,
according to Jasek. He says the company's
acreage spans the entire spectrum from
the dry gas window, to the wet gas window
with high condensate and natural gas liquids, to the volatile oil and black oil windows.
"We are lucky to have acreage in every
window," he reflects, noting that Newfield's challenge is to maintain its leasehold
by holding acreage through the drill bit.
He says the company's priority with its
drilling program this year is to ensure it
is holding its acreage by production, and
it's not worrying too much about what
window wells are drilled in.
"We have developed commercial wells
in all three windows," Jasek emphasizes,
adding that Newfield has lowered completed well costs dramatically by improving efficiency. "Our 2016 projected
average was $7.3 million," he relates.
"Two years ago, the cost was north of
$10.0 million. We are drilling one well
per section to hold acreage with production. As we go forward, we will progress
into full-field development and then pad
development. There is a lot of efficiency
to be gained as we take the next step. We
have the vision to get costs to $6.0 million
per well in development."
Jasek says 50 percent of Newfield's
STACK acreage was held by production
at year-end 2015, and he expects to move
into full-field development by late 2017,
especially should prices rebound in the
coming months. He adds that Newfield
already is drilling on pads in SCOOP.

Knowledge Transfer
Danny Aguirre, manager of investor
relations, says Newfield has proven operating teams that have had success in
the Eagle Ford and the Bakken shale
plays, and that experience is paying dividends in the Anadarko Basin.
"That knowledge transfer will get us
to $6.0 million a well quicker," he states.
"We cannot control commodity prices,
but we can control completed wells costs
and EURs. Our corporate development
team can identify every location and
every well's EUR, and what wells need
to be drilled to hold acreage by production.
We build off that, based on our budget.
Everyone is involved."
Jasek says the company's STACK
wells have a type curve of 950,000 boe,
which includes gas, NGLs, and black oil.
The EURs of its SCOOP acreage in the
oil window average 1.2 MMboe. "When
prices rebound, we will be in a position
to thrive, to make hay while the sun
shines," he enthuses.
Jasek says Newfield has very few
wells that are drilled but uncompleted.
"We want to complete our wells immediately because they are economic today,"
he emphasizes. "We want to get returns
as fast as possible. Cash flow is a piece
of preserving liquidity. Newfield is a toptier operator, and we are driving down
well costs and becoming more efficient.
We are making sure we hold acreage in a
premier SCOOP and STACK position to
make an economic play even more economic."

After completing an acquisition of Felix Energy earlier this year, Devon Energy's position
in the STACK play has expanded to 430,000 net surface acres in the overpressured oil
window. With up to 10 potential target intervals, the company has identified more than
5,000 undrilled locations on its leasehold, including 1,600 risked Meramec locations.
Shown here is a producing well location in Blaine County, Ok.

74 THE AMERICAN OIL & GAS REPORTER

Newfield Exploration led development
of the Arkoma Woodford Shale play in
2007 in eastern Oklahoma. Jasek says
Newfield went back into the Arkoma
Basin and drilled five dry gas wells last
year with a joint venture partner.
"We decided to go back into the Arkoma Basin to understand its value today,"
he explains. "It is a large resource and
we need to understand it, although it is
not going to compete at today's margin.
We have learned a lot more about completing these wells than we knew five
years ago."
Production is 99 percent dry gas in
the Arkoma Woodford, and Newfield has
146,000 net acres in the play.
Expanding In The STACK
Devon Energy completed its $1.9 billion acquisition of Felix Energy on Jan.
7, which secured 80,000 net acres in the
most economic portion of the STACK
oil window, according to Dave Hager,
president and chief executive officer.
Speaking at the Scotia Howard Weil
conference in late March in New Orleans,
Hager said the acquisition gave Devon a
leading position in the STACK play of
430,000 net surface acres. Situated in
the play's overpressured oil window, he
noted that the properties included targets
with up to 10 intervals.
"We have identified more than 5,000
undrilled locations. About 1,600 are risked
Meramec locations, and we expect this
to expand over time," Hager commented.
Fourth-quarter Meramec activity was
highlighted by Devon's participation in
12 high-rate wells that achieved peak 30day rates during the fourth quarter, according to Hager. Production from the
12 wells reached a high of nearly 1,700
boe/d. Eight of the wells were drilled on
Devon's legacy acreage and averaged
1,520 boe/d, of which 45 percent was
light oil.
Hager says four development wells
also were brought on line in the fourth
quarter on the acquired Felix acreage
within the oil windows of the play. Initial
30-day production averaged 1,990 boe/d,
60 percent of which was light oil.
Productivity continues to improve in
the STACK, according to Hager. He points
out that the industry has drilled more
than 100 Meramec wells since 2013, and
well productivity has increased by about
40 percent. He attributes the increase in
per-well productivities to improved well

American Oil and Gas Reporter - May 2016

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