American Oil and Gas Reporter - May 2021 - 50

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SpecialReport: Industry Playmakers

After closing in March on a deal to purchase 130,000 net acres in the Powder River
Basin, Continental Resources is earmarking $80 million to begin delineating and
developing multiple stacked reservoirs, focusing initially on the Shannon, Frontier and
Niobrara, but with an eye on future targets in the Sussex, Mowry and Muddy formations.

two rigs to begin delineating and developing the Shannon, Frontier and Niobrara
reservoirs in Campbell, Converse and
Johnson counties, Wy., he details. Future
targets include the Sussex, Mowry and
Muddy formations.
Multiple stacked reservoirs, within a
5,000-foot interval, are 70%-80% oil and
in the early stages of development, Stark
says. The acquired acreage is 80% held
by production and came with 9,000 boe/d
in production.
" When you step back and take a look
at the properties, three out of the top five
oil-producing wells in the basin are located
within our acreage block, all with 30day IPs of more than 2,000 boe/d, and
two of those were operated by Samson, "
he points out.
The Ogalalla No. 40-75SH posted an
IP of 2,235 boe/d (94% oil) and the
Spearhead 75SBH produced 2,184 boe/d
(98% oil), both from the Shannon, according to company information.
Well construction is similar to properties in the Bakken and Oklahoma, says
Pat Bent, senior vice president of operations. True vertical depths range from
10,500 to 13,500 feet with two-mile laterals and the potential exists for longer
ones utilizing the same technologies and
approaches, he adds.
" Our long history of operational excellence in all of our operating basins
gives us the confidence to be best in
class. This is another opportunity to
deploy that capability, " Bent says.
During the first quarter, Continental
worked to integrate operations with plans
50 THE AMERICAN OIL & GAS REPORTER

to deploy the first rig in May and the
second in June, he says. For the year,
15-17 Powder River wells will be spudded
with up to 10 completions in the play,
he elaborates.
Despite the BLM permit freeze, Continental's leadership does not see impediments to drilling, he says, and is encouraged by recent permit approvals.
Continental will continue to rely on
steadfast, repeatable performance in the
Bakken, where the company plans to
spend 60% of its $1.1 billion drilling and
completion budget, Stark says. " Bakken
performance has probably the best repeatability of any play in the country
right now, and we are very pleased with
what we have there, " Stark says.
Continental has enough overall drilling
inventory to grow the company at a 5%
compounded annual growth rate over the
next 10 years considering its holdings in
the Bakken, Oklahoma and now the Powder River, he says.
The company already has lowered
debt beyond initial guidance, to $4 billion
from $4.5 billion announced earlier, Stark
says. About 58% of cash flow scheduled
for reinvestment, including 35% in the
Oklahoma SCOOP play, where the company's SpringBoard projects are on track,
he says.
" We are an exploration company and
SCOOP is an example of that, and so is
our core position in the Bakken, " Stark
says. " The reason we have such sustainable
and repeatable results is because with the
geology and our early entrance, we have
a huge position in the core of the assets. "

Double-Premium Assets
Throughout its operational footprint,
EOG Resources Inc. is high-grading locations to select properties for development
that are considered " double-premiums "
that boost returns and cash flow, says
CEO William R. " Bill " Thomas.
Premium properties in the Delaware
Basin and Eagle Ford are being targeted,
but the company also is increasing activity
at Powder River Basin as the Wyoming
play enters a new phase of development.
EOG expects to spend $3.7 billion$4.1 billion this year to maintain oil production at 440,000 boe/d and complete
approximately 500 net wells as it continues
to increase shareholder value and returns
with a focus on wells that generate a
60% rate of return at $40 oil, Thomas
explains.
" We are leasing and testing on some
of the new plays that we have been developing over the past few years, and
those are very high-impact plays; double-premium kind of plays, " he told investors at an Evercore conference in
March. " We are set to generate an enormous amount of free cash flow-$2.4 billion at $50/bbl (WTI)-obviously, a lot
more at $60/bbl. We have already increased
the regular dividend by 10%. "
In the Delaware Basin, EOG plans to
average 14 rigs and four frac crews in
2021, with plans to bring 275 wells on
line by year's end on its 404,000-net acre
position in West Texas and southeastern
New Mexico, according to company information. A well cost reduction of 5%
is targeted in the Delaware, where the
company boosted production by 10% last
year. Altogether, EOG has 6,300 net undrilled locations in the Delaware.
In the Eagle Ford, EOG is keeping three
rigs and two frac crews busy, with plans
for 145 completions this year. It has 1,900
premium undrilled locations in the play.
Thomas notes that a lot of the company's growth over the past decade came
from the Eagle Ford, which although a
more mature play now, still has substantial
inventory, including multiple double-premium properties.
After continuing to delineate plays
and install infrastructure along development corridors to reduce costs, EOG
is running two rigs and one frac crew
in keeping with plans to complete 45
net Powder River wells tapping into
the Parkman, Niobrara, Turner and
Mowry formations.
If the company meets its well cost

American Oil and Gas Reporter - May 2021

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