Devon Energy Corp. has completed a record-setting well in the over-pressured oil window of Oklahoma's STACK (aka the Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties), management said Tuesday.
The Oklahoma City-based independent said the Privott 17-H well, drilled with a 10,000-foot lateral and targeting the Meramec formation, yielded a facility-constrained 24-hour initial production (IP) rate of 6,000 boe/d, 50% weighted to oil.
"When compared against publicly available data in the STACK, the Privott well achieved the highest initial production rate of any well by a wide margin and is expected to recover in excess of 2 million boe over the life of the well," Devon management said.
Besides Privott 17-H, the exploration and production (E&P) company brought online four other "high-rate" Meramec wells in the core of the STACK's over-pressured oil window during the second quarter, management said. Combined, the wells averaged 2,000 boe/d 30-day IP rates, or 300 boe/d per 1,000 feet of gross perforated interval.
"The outstanding well results we're achieving from our enhanced completion design in the STACK is another example of Devon's technology leadership in the upstream space," COO Tony Vaughn said. "Looking ahead, we expect to continue to build operational momentum in the STACK as we transition our activity to multi-zone development drilling that will drive additional efficiency gains and maximize the value of our resource."
Devon also said Tuesday it plans to spud its first multi-zone development in the STACK, the Showboat project, in the third quarter. Showboat comprises 25 wells across four landing zones and builds on "the unique library of information the company has accumulated through participation in the majority of industry wells" in the play.
"Devon will continue to test development concepts including well density, multi-layer well stacking, intra-layer well staggering and further completion design improvements," said E&P chief Wade Hutchings. "This continual flow of data from our extensive position in the STACK will inform and improve our deep inventory of future multi-zone developments and the overall value of our coveted STACK resources."
Devon currently has three operated spacing pilots running in the core of the STACK's overpressured oil window with 5,000-foot laterals that have averaged 180-day cumulative production rates of roughly 220,000 boe/ well, slightly weighted to natural gas.
Devon has about 600,000 net acres in the STACK, including exposure to 5,400 risked locations and 10,000 unrisked locations.
Wells Fargo Securities LLC analysts said in a note the latest Meramec results "are certainly a positive signal for Devon, particularly given the proximity of the Privott well to the Showboat development. The IP figures top already impressive well results that we've seen from several operators in the basin thus far, and the fact that Devon believes the enhanced performance is driven by its completion design is an added positive.
"That said, variability has been a theme in the Meramec -- and we'll watch for repeatability of these results as the company continues to develop the play."
During a conference call earlier this year to discuss first quarter results, Devon highlighted its plans to increase activity in the STACK and in the Permian's Delaware sub-basin in West Texas.
Devon also highlighted plans to divest $1 billion of its noncore assets, including the Barnett Shale in North Texas, to provide "increased certainty that we can deliver on the growth results even if commodity prices soften, because these wells are still generating incredible rates of return even at somewhat lower prices."
Whether the STACK assets remain economic at lower prices could now be put to the test, as crude oil pricing has softened since early May, recently trading in the mid-$40s/bbl. Devon has scheduled a conference call Aug. 2 to discuss 2Q2017 results.