Newfield to build Woodford shale gathering system

By OGJ editors
HOUSTON, Sept. 26 -- Newfield Exploration Co., Houston, signed a 15-year agreement with MarkWest Energy Partners LP, Denver, to construct and operate gas gathering pipelines and related facilities for development of Newfield's Woodford shale play in the Arkoma basin of southeastern Oklahoma.

MarkWest plans to invest $175 million by yearend 2007 and $350 million over the next 4 years to build a gathering infrastructure, including compression, dehydration, and treating, over 200 sq miles in a four-county region. The system will include more than 400 miles of large diameter pipeline and 100,000 hp compression for a takeaway capacity exceeding 500 MMcfd. The agreement includes a renewal option at the end of the agreement period.

Newfield has drilled more than 100 vertical wells and 30 horizontal wells in the Woodford shale. Late last year, Newfield shifted its drilling program to horizontal wells, which increased initial production rates and the estimated ultimate recovery of reserves in place. Its five most recent wells averaged initial productions of 3.7 MMcfd of gas. Company officials expect the average Woodford horizontal well to gross 2.9 bcf of gas.

The company is still acquiring acreage, with interest in more than 350,000 gross lease acres (more than 125,000 net acres). Newfield expects to increase its drilling program to 13 rigs by yearend from 6 currently and to as many as 20 rigs by the end of 2007. It plans to spud 60 horizontals wells in the Woodford play in 2006 and up to 155 horizontal wells in 2007.

"By the end of 2009, we expect our gross Woodford shale production to increase from a current rate of about 65 MMcfd to more than 350 MMcfd," said Lee K. Boothby, president of the subsidiary Newfield Mid-Continent Inc. in Tulsa.

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