Energen pursuing Permian basin liquids plays

By OGJ editors

Energen Resources Corp., Birmingham, Ala., said it replaced its 2011 production and added 20% to its proved reserves for a yearend total of 343 million bbl of oil equivalent.

About 45 million boe of additions came from proving up probable and possible reserves mainly in the Permian basin, where 54% of the company’s proved reserves now reside. More than half of the company’s yearend proved reserves are liquids.

Energen made good progress in the vertical Wolfberry play in the Midland subbasin of the Permian basin and is seeing good results from its more recent Third Bone Spring wells that have been drilled on the east side of the Pecos River.

Avalon shale potential remains unclear, and Energen likely will redirect planned Avalon capital to the deeper Wolfcamp shale formation in 2012; the Wolfcamp is thought to have a higher mix of oil to gas, and its production will hold the shallower Avalon shale.

Energen drilled 153 net Wolfberry wells in 2011 and completed another 22 spudded in 2010. Of these 175 wells, 122 are producing and 53 are waiting on completion. Initial stabilized rates from the 39 wells brought on line in the fourth quarter averaged 65 b/d of oil and 150 Mcfd of wet gas. Energen’s risked model initial stabilized rate is 55 b/d and 110 Mcfd.

Energen has 32,000 net undeveloped acres in the Wolfberry play and some 800 potential drilling locations based on 40-acre spacing. The company’s estimated cost to drill and complete a Wolfberry well in 2012 is $2.3 million.

Meanwhile, Energen drilled and completed 18 net Third Bone Spring wells in 2011 and completed 2 wells spudded in 2010; another 5 are drilling, waiting on completion, or testing.

The seven wells brought on line in the fourth quarter had an initial stabilized rate of 485 b/d of oil and 1,085 Mcfd of wet gas. The initial stabilized rate of all 20 net wells brought on line in 2011 averaged 400 b/d and 1,035 Mcfd. The initial stabilized rate in Energen’s risked, weighted average Third Bone Spring model is 260 b/d and 735 Mcfd.

The majority of 12 wells drilled on the west side of the Pecos River have underperformed relative to wells drilled on the east side. In general, the western wells have encountered higher amounts of water, and efforts to optimize production from nine wells that have had steeper-than-expected declines have been hampered by limited infrastructure. With water disposal wells drilled late in 2011, Energen has lately been able to install pumps on three of the west-side wells and continues to work to improve production.

Energen has 68,000 net undeveloped acres prospective for the Third Bone Spring sands and 210 potential drilling locations based on 320-acre spacing. The company’s estimated cost to drill and complete a Third Bone Spring well in 2012 is $7.5 million.

Energen’s Avalon shale test well in Loving County had an initial stabilized rate of 200 b/d of oil and 750 Mcfd of wet gas. The rate has declined to 75 b/d and 750 Mcfd. The well’s completion design utilized smaller fracs in an effort to reduce produced water and maximize hydrocarbon production; instead, hydrocarbon production may actually have been hampered by the use of smaller fracs, the company said.

Energen has 110,000 net undeveloped acres are prospective for Avalon shale and 340 potential drilling locations based on 320-acre spacing.

Related Articles

EIA: US gasoline prices to average $1/gal less in 2015 vs. 2014

02/10/2015 US regular gasoline retail prices are expected to average $2.33/gal in 2015, down from $3.36/gal in 2014, according to the Energy Information Admin...

BHI: US rig count down 87 units in 10th straight week of losses

02/06/2015 The US drilling rig count plunged 87 units, a decline that was again spurred mostly by oil rigs, to settle at 1,456 rigs working during the week en...

PAA to expand Delaware basin crude pipeline systems

02/05/2015 Plains All American Pipeline LP (PAA) plans to build two Delaware basin crude oil pipelines and related gathering systems, to expand its existing B...

EnLink agrees to purchase Coronado Midstream for $600 million

02/02/2015 EnLink Midstream has agreed to acquire Coronado Midstream Holdings LLC, which owns natural gas gathering and processing facilities in the Permian b...

BHI: Texas anchors 90-unit plunge in US rig count

01/30/2015 The US drilling rig count plunged 90 units—a majority of which were in Texas—to settle at 1,543 rigs working during the week ended Jan. 30, Baker H...

Oxy cuts capital budget by a third

01/30/2015 In the midst of falling oil prices, Occidental Petroleum Corp., Houston, expects to reduce its total capital spending for 2015 to $5.8 billion from...

PwC: Low oil prices might drive surge in restructuring in 2015

01/29/2015 Mergers and acquisitions (M&A) in the oil and gas industry hit 10-year highs in terms of deal value and volume in 2014, according to a report f...

ETP, Regency to merge in $18-billion deal

01/26/2015 Energy Transfer Partners LP (ETP) and Regency Energy Partners have agreed to merge in a unit-for-unit transaction, plus a one-time cash payment to ...

BHI: US rig count falls for 8th straight week, down 43 units


The US drilling rig count fell 43 units to settle at 1,633 rigs working during the week ended Jan. 23, Baker Hughes Inc. reported.

White Papers

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by

Available Webcasts

Global LNG: Adjusting to New Realties

When Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?


US Midstream at a Crossroads

When Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.


On Demand

The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected