By OGJ editors
HOUSTON, July 20 -- Newfield Exploration Co., Houston, said it sees a net resource potential of more than 700 million bbl of oil equivalent on its holdings in the Uinta basin in the wake of two acquisitions that closed in May that added 70,000 net acres for $300 million.
Newfield will increase its operated rig count from the historic five rigs to eight in 2012 to aggressively develop its 6,000-plus well inventory of oil locations. The company owns working interests averaging more than 70% in 250,000 net acres in the basin.
The company expects 2012 Uinta basin daily production to increase at least 25% from 2011. The increased play options combined with fewer permitting constraints will allow Newfield to greatly increase its future growth in production and reserves there.
Newfield has drilled six horizontal wells to the Uteland Butte member of the Eocene Green River formation at 6,000-9,000 ft true vertical depth, which covers 80% of the company’s acreage in the basin. The wells, in Monument Butte field, had initial rates of 500 b/d of oil equivalent, more than six times that of a traditional vertical Green River well.
Based on an estimated inventory of at least 1,800 locations at 160-acre spacing, Newfield’s net resource potential associated with the Uteland Butte formation is nearly 300 million boe. The company estimates average a gross EUR of 300,000 boe/well for $2.8 million/well. It plans four more wells in 2011 and more than 30 in 2012.
The Eocene Wasatch formation at 9,000-11,000 ft has produced more than 400 million boe in the southerly extension of giant Altamont-Bluebell field. In the last year, eight vertical wells have been drilled on Newfield’s acreage. Recent vertical wells averaged gross initial potential rates above 1,000 boe/d.
Newfield estimates a net Wasatch resource potential of more than 45 million boe. It has identified 380 locations on 320-acre spacing with EURs expected to average more than 260,000 boe. Completed well costs range from $1.2-3.3 million. The company believes future application of horizontal drilling and completion technology and increased drilling density could double the expected net resource potential.
The company expects to complete 25 more Wasatch wells this year and at least 50 in 2012.
Newfield has been developing the shallow Green River formation since entering the basin in 2004. The oil play is economic on at least 165,000 net acres, and 2,100 wells have been drilled.
More than 4,000 locations remain on 20-acre spacing in Monument Butte and on 40-acre spacing in the Central Basin. The company’s Monument Butte acreage is under US Bureau of Land Management jurisdiction. At the current drilling pace, the inventory will last more than 10 years.
Newfield has drilled more than 300 wells on the Central Basin acreage and, with further data, believes the area could be prospective for future waterflood and 20-acre development. Current resource estimates do not include the potential for 20-acre spacing or secondary recovery in the Central Basin.
Newfield estimates that the Green River formation has net remaining resource potential of 360 million boe, including developed and undeveloped waterflood potential only in Monument Butte. At yearend 2010, Newfield had proved reserves in the Green River formation of 140 million boe.
Gross production from the Uinta basin has grown to 22,000 b/d of oil from 7,000 b/d. Green River wells are being drilled and completed in 4-5 days for $930,000/well for gross EURs of 75,000 boe.
Since Newfield’s 2004 entry into Monument Butte field, expected recovery of oil in place has increased from 8% to 16% or more. Newfield expects to drill 300 wells in the shallow Green River in 2011 and 250-300 wells in 2012 as additional resources are allocated toward the new Uteland Butte and Wasatch plays.
Newfield is investing $75 million into field infrastructure projects in 2011, which will nearly match the company’s cumulative investment in infrastructure from 2004 to 2010. As development drilling has moved northeast and into deeper geologic horizons, the gas-oil ratio has increased. As a result, more compression and enhanced gathering infrastructure are required.
Once fully operational, the new facilities will allow for increased oil production from these areas. The company expects to invest $100 million into infrastructure projects in 2012 to accommodate long-term oil growth objectives from the basin.