Devon Energy Announces Resource Expansion in the Delaware Basin with Successful Leonard Shale Spacing Test
December 06 2016 - 04:00PM
Business Wire
Devon Energy Corp. (NYSE: DVN) announced today an increase to
its risked drilling inventory in the Delaware Basin following a
successful Leonard Shale stacked spacing test in southeast New
Mexico.
The Thistle spacing pilot tested 400-foot vertical spacing
between the Leonard Shale “B” and “C” intervals in the southwest
corner of Lea County, New Mexico. Initial 30-day production rates
from this two-well pilot averaged 1,800 oil-equivalent barrels
(Boe) per day per well, of which 75 percent was light oil. The
Thistle wells were drilled with 7,000-foot laterals at a cost of
about $6 million per well.
Early results from the Leonard Thistle pilot also indicate
minimal interference between wells, suggesting potential for joint
development of multiple intervals in this portion of the Leonard
play. With the success of this stacked spacing test, Devon is now
raising its risked inventory in the Leonard Shale to 950 gross
locations. This increase in risked inventory represents growth of
nearly 20 percent from previous estimates and conservatively
assumes only six wells per surface section. The company expects its
risked inventory in the Leonard to continue to expand with further
delineation work.
Overall, the company has 60,000 net surface acres in the Leonard
Shale play, with gross pay ranging up to 1,100 feet and as many as
three different landing intervals. Adding up the Leonard leasehold
by target landing interval, Devon has exposure to 160,000 net
effective acres. This early-stage development play has potential
for greater than 1 billion Boe of recoverable resource.
“The strong flow rates from the Thistle spacing pilot is another
example of the positive rate of change we are achieving in the
Delaware Basin and is another critical step in further delineating
the massive resource upside associated with our North American
onshore portfolio,” said Tony Vaughn, chief operating officer. “In
the upcoming year, we plan to continue to accelerate drilling in
our world-class Delaware Basin and STACK assets. We expect this
increased activity to deliver strong growth in high-margin
production and further expand our recoverable resource in the
U.S.”
Delaware Basin: A Multi-Decade Growth Platform
Devon has one of the best Delaware Basin positions in the
industry with stacked-pay potential providing exposure to the
Delaware Sands, Leonard Shale, Bone Spring, and Wolfcamp
formations. The company’s position is extremely well positioned on
the North American cost curve. In aggregate, the company has
exposure to 670,000 net acres by formation, with nearly 6,000
risked undrilled locations and greater than 20,000 unrisked
locations in this basin.
Converting the massive and growing opportunity in the Delaware
Basin into production and free cash flow is a top priority for the
company. Devon remains on track to accelerate drilling activity to
three operated rigs by year end 2016. Depending upon cash flow
availability, the company has the potential to further ramp-up
activity to as many as 10 rigs by the end of 2017. This increase in
drilling activity will focus on the Bone Spring, Leonard Shale and
Wolfcamp targets.
About Devon Energy
Devon Energy is a leading independent energy company engaged in
finding and producing oil and natural gas. Based in Oklahoma City
and included in the S&P 500, Devon operates in several of the
most prolific oil and natural gas plays in the U.S. and Canada with
an emphasis on a balanced portfolio. The Company is the
second-largest oil producer among North American onshore
independents. For more information, please visit
www.devonenergy.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the federal securities laws. Such statements are
subject to a number of assumptions, risks and uncertainties, many
of which are beyond the control of the Company. These risks
include, but are not limited to our ability to replicate the
results described in this release for future wells; all the other
uncertainties, costs and risks involved in exploration and
development activities; and the other risks identified in the
Company’s Annual Report on Form 10-K and its other filings with the
Securities and Exchange Commission (the “SEC”). Investors are
cautioned that any such statements are not guarantees of future
performance and that actual results or developments may differ
materially from those projected in the forward-looking statements.
The forward-looking statements in this press release are made as of
the date hereof, and the Company does not undertake any obligation
to update the forward-looking statements as a result of new
information, future events or otherwise.
The SEC permits oil and gas companies, in their filings with the
SEC, to disclose only proved, probable and possible reserves that
meet the SEC's definitions for such terms, and price and cost
sensitivities for such reserves, and prohibits disclosure of
resources that do not constitute such reserves. This press release
contains certain terms, such as recoverable resource, risk and
unrisked locations and other similar terms. These estimates are by
their nature more speculative than estimates of proved, probable
and possible reserves and accordingly are subject to substantially
greater risk of being actually realized. Investors are urged to
consider closely the disclosure in our Annual Report on Form 10-K
and other SEC filings.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161206006333/en/
Devon Energy CorporationInvestor ContactsScott Coody,
405-552-4735Chris Carr, 405-228-2496Media ContactJohn
Porretto, 405-228-7506
Devon Energy (NYSE:DVN)
Historical Stock Chart
From Feb 2024 to Mar 2024
Devon Energy (NYSE:DVN)
Historical Stock Chart
From Mar 2023 to Mar 2024