Devon Energy Corp. said Friday it is close to producing about 1 Bcfe/d of natural gas from the Barnett Shale, and the producer's leasehold in the play has the potential to double its output by the end of the decade -- two years from now.
The Barnett Shale's total production is currently at 3.5 Bcfe/d from around 8,000 wells. Devon now has about 3,200 wells operating in the field and is adding 500-600 wells a year.
Devon will no doubt hit a steady 1 Bcf/d mark in 2Q2008, said Steve Hadden, senior vice president for exploration and production. Hadden and CEO J. Larry Nichols Friday spoke during a conference call with financial analysts.
"The company could double its Barnett production within two years to between 1.6 Bcf/d to 2 Bcf/d," said Hadden.
In total, Devon has 4.3 Tcfe of proved reserves in the Barnett Shale. It also has an additional 25 Tcfe of probable and possible resources and additional contingent resources in the region.
Devon's Barnett leasehold is estimated at 18.3 Tcfe, Hadden said. However, the amount is only a "conservative estimate" because the company has not tapped all of the Barnett's potential.
Because of its resource base, "it should be clear that Devon has the opportunity to achieve meaningful growth for many years to come," said CEO J. Larry Nichols. Devon "should see sustained production growth without depletion of assets" and it would be difficult to replicate the company's current asset base. "Our growth," he said, "is a challenge we have met in the past and will continue to meet."
Led by its enormous advantage in the Barnett, "we have built a very strong, very focused portfolio in some of the best places in the world to explore," said Hadden. The Oklahoma City-based producer also has the potential to build its total global output by an average 13% a year through 2011 based on commodity futures prices.
Devon's total unrisked resources now stand at 24.1 billion boe, with proved reserves of 2.5 billion boe, and total risk resources of around 10.77 billion boe.
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