WPX announces plans to increase oil production fivefold
Thursday, October 30, 2014
FARMINGTON — WPX Energy executives have announced a plan that would increase oil production fivefold by 2020 and some of that production will be in the San Juan Basin.
"We added a third rig. We continue to see operation results that continue to please us," said Rick Muncrief, WPX Energy CEO, about the San Juan Basin during a webcast presentation to investors on Oct. 9.
The company has plans to increase national oil production from 16,000 million barrels of oil per day to 81,000 barrels of oil per day by 2020.
"We think that this is going to play out well," he said.
WPX has added a third rig to the area, has decreased the time for "spud to release" — which is from drilling to production — to less than 10 days, and increased acreage it intends to explore in the San Juan and Gallup Sandstone areas.
Since 2013, the company has increased their acreage in this area by 164 percent.
"We (have) been operating there for 30 years," Muncrief said.
The company says the production it is getting from the wells in the San Juan Basin is 70 percent oil, while the remaining 30 percent is split equally between natural gas and liquid natural gas.
"It's a light sweet oil, easy to move, easy to deal with," Muncrief said. "We really love what we have there."
WPX has taken its Gallup Sandstone oil exploration project in the San Juan Basin from zero well heads to more than 400 in less than 18 months. And it reduced its average well cost in the basin by 26 percent during the first half of 2014 compared to 2013, according to a press release.
Muncrief said WPX has also completed two 7,500-foot horizontal drilling projects.
The San Juan Basin is one of three play areas where the company plans to increase production and investment through the next five years.
WPX plans to increase their capacity to transport oil from 100,000 barrels per day to about 125,000 barrels per day by 2016, Muncrief said.
Company plans include oil production in the Williston Basin in North Dakota, natural gas in the Piceance Basin, and oil and natural gas in the San Juan Basin.
The company plans to leave the Marcellus Shale Region, a large producer of natural gas, and focus their efforts on the western plays because it expects natural gas prices to continue a downward slide in the east, while natural gas prices are expected to slightly increase in the Western plays.
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