American Oil and Gas Reporter - June 2019 - 91

SpecialReport: Permian Basin Activity
we are doing it efficiently," he adds.
"That is a credit to our financial strength,
our strong ownership and the great people
in our Hobbs, N.M., and Midland offices.
There aren't many privately held companies like Mewbourne Oil around anymore.
We are able to take a longer-term view,
and our future in the Permian Basin has
never been brighter."
Hot Spot

When Mewbourne Oil Company was operating in the Permian Basin 10 years ago, its
output was 2,000 barrels a day. President and Chief Executive Officer Ken Waits says
the company, taking advantage of the region's "once-in-a-lifetime opportunity," now is
approaching the 100,000 bbl/d mark.

New Mexico Production
Mewbourne Oil has become the fifthlargest oil producer in New Mexico, according to Waits. The privately owned
company based in Tyler, Tx., focuses on
the Wolfcamp and Bone Spring formations
in Lea and Eddy counties in the Delaware
Basin. It also is active on the Texas side
of the border in Loving County.
"We had 10 rigs in the fourth quarter,"
Waits says. "We currently are running
eight rigs, but we will be back up to 10
by mid-summer."
He says Mewbourne is a big believer
in the benefit and efficiency of drilling
multiple wells with extended (two-mile)
laterals, allowing it to employ zipper
fractures. "It is a win-win for efficiency,
and it reduces our environmental footprint,"
Waits asserts.
Mewbourne has 250,000 gross acres in
New Mexico, and typically drills four wells
on each pad. The Wolfcamp offers multiple
zones of shale and sand, and Waits says
the company will drill single zones in one
location or multiple zones in other locations,
depending on the situation.
"We see the relationship between
parent and child wells, and prefer to fully
develop a single zone, but we are flexible
and consider all factors before making
that decision," he explains. "There has
been an evolution in the industry from
gel fracs to slickwater fracs or some
hybrid form of both. We generally use

slickwater fracs, and we like our results.
We are pumping 2,000-2,500 pounds of
sand per lateral foot, depending on the
formation. While I was pleased to see an
independent study by Rystad Energy that
Mewbourne's results in New Mexico
were the best in industry, we always are
trying to improve our results."
Waits says Mewbourne has been able
to cut its sand costs in half by using sand
from West Texas mines, eliminating much
of the transportation cost.
"We will drill 125 wells this year, and

While operators are busy from one
end of the Permian Basin to the other, no
place has seen more activity than Reeves
County, Tx., in the southern Delaware
Basin, where 61 rigs were operating in
mid-May.
Denver-based PDC Energy has 42,000
acres in Reeves County and has been operating three rigs, although Chief Operating
Officer Scott Reasoner says the company
plans to move to two rigs in June.
"Our primary focus is the Wolfcamp
A, B and C," he offers, "but we also did
a test in the Third Bone Spring recently.
We are testing as many as three zones off
a single pad."
Reasoner said PDC initially drilled
single-well pads in order to hold acreage,
but it is now drilling four-six wells a pad.
The company spudded 10 wells and turned
nine wells on line during the first quarter.
The Argentine S5, PDC's first Third
Bone Spring well, showed an early average
of 190 boe/d per thousand feet (70% oil),
according to Reasoner. The company's

PDC Energy's Permian Basin focus is on the Wolfcamp A, B and C formations, although
Chief Operating Officer Scott Reasoner says it has tested the Third Bone Spring. The
company is drilling four to six wells on its pads in Reeves County, Tx., and turned nine
wells on line during the first quarter of 2019.

JUNE 2019 91

American Oil and Gas Reporter - June 2019

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