Newfield Exploration Co. has signed an agreement to supply 18,000 b/d of crude oil from its Uinta basin fields to Tesoro Corp.’s 60,000 b/d Salt Lake City, Utah, refinery.
Newfield said the agreement spans a 7-year period starting in 2013 and secures additional supply capacity for the company’s planned oil growth in the basin. The oil price differential associated with this agreement is not materially different than Newfield’s current supply contracts in the basin.
Newfield has been active in the basin since 2004. Multiple oil-productive geologic targets exist across the acreage, and an active drilling campaign is under way to develop the more than 6,000 potential locations.
Newfield plans to test multiple horizontal intervals in 2012 in two new central basin oil developments, the Uteland Butte and Wasatch formations, on which it disclosed initial tests in mid-2011 (OGJ Online, July 20, 2011). The company has been increasing its rig count and expects to run at least eight rigs in the basin next year, up from an historic five-rig program.
Newfield sells its crude oil from the Uinta basin to multiple Salt Lake City-area refiners and continues to work with each to secure additional refining capacity to meet future growth plans from the region.