Anadarko developing 12 wells on 1/2 section and central oil processing center in Loving county.
Anadarko Petroleum Corp.’s (NYSE: APC) average oil production in the Permian’s Delaware Basin jumped 88% during second-quarter 2018 as the company works to add more wells to pads and gain overall optionality by eyeing opportunities in Wyoming’s Powder River Basin.
“Results in the Delaware Basin are the engine driving much of our recent success, and we are just getting started as we pace our midstream takeaway with our upstream development,” Anadarko CEO Al Walker said on an earnings call Aug. 1. “Our infrastructure buildout achieved several key milestones during the quarter with the startup of our Reeves Regional Oil Treating Facility [ROTF]” and commissioning of the North Loving ROTF subsequent to quarter end.
The company reported a day earlier that revenue increased to $3.29 billion for the second quarter, up from about $2.7 billion a year ago. U.S. onshore oil volumes grew by 47%, adjusted for divestitures, to 169,000 barrels of oil per day (bbl/d). Accounting for most of the growth was the Delaware Basin, where sales volumes were 62,000 bbl/d, up from 33,000 bbl/d a year ago.
Anadarko plans to begin production from its first full-pad development at Silvertip-A in Loving County, Texas, in second-half 2018. Twelve extended-reach lateral wells over a half section across five target zones have been completed and are awaiting the Loving ROTF and associated infrastructure build, which are needed to bring the wells online, said Danny Brown, executive vice president of U.S. onshore operations. He noted the company installed additional sensor equipment to monitor downhole performance and get more data on production flow.
This comes as the company works to bring Delaware well costs down from $10 million to $8 million by increasing the number of wells per pad to between four and five, something Anadarko hopes to accomplish within the next two to three years.
In addition, “We have been working our Gen 2 completions, which are essentially like some others in the industry—higher water content, higher proppant, closer spacing,” Brown said. “We’ve been pleased with the performance we see there. I anticipate that will be our completions style as we move through the foreseeable future.” He later added that the company has been pleased with the performance of individual wells as it relates to downtime and field performance.
“That’s one of the reasons why you’ve seen us shift our capital over the course of this year,” Walker added. In all, Anadarko increased its full-year capital investment expectations by $250 million from previous guidance of between $4.5 billion and $4.8 billion.
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