An acquisition of acreage and production in the Anadarko Basin last spring is paying off for Midstates Petroleum Co. Inc., according to the company’s operations update released Wednesday. The news cheered investors, who lifted Midstates shares more than 14% Wednesday.

In April, Midstates added about 36.4 million boe of proved reserves, 45% oil and 21% natural gas liquids (NGL), of which 34% are proved developed producing (see Shale Daily,April 5). “The integration of the new Anadarko Basin assets and operations team has gone very well, CEO John Crum said Wednesday.

Production from the acquired Anadarko Basin properties is 9,500 boe/d, up 19% compared with 8,000 boe/d when the company assumed control of the properties June 1, Midstates said.

The company has five rigs drilling horizontal wells on the Anadarko Basin properties, primarily targeting the Cleveland formation. Three rigs were active when the company assumed operations on June 1; a fourth rig was added in July and a fifth rig was added in August.

Midstates has spud 13 wells since June 1 and placed 11 wells on production on the properties. There are six wells targeting the Cleveland formation that have been on production about 30 days with an average initial production rate of 373 boe/d, Midstates said. “This is above expectations that were provided at the time of the acquisition.” Drilling is completed on four additional wells and they are scheduled to be placed on production in the next several weeks.

Overall, Midstates current daily production has reached about 30,000 boe/d net compared with 19,634 boe/d in the second quarter. Production from Mississippian Lime/Hunton operations is about 15,000 boe/d, up 44% compared with 10,426 boe/d in the second quarter. Production from Louisiana operations is 5,500 boe/d.

Wells Fargo Securities analyst David Tameron has an “outperform” rating on Midstates. “Investors have been concerned about [Midstates’] changing story line following transformational acquisitions — we believe incremental operations updates will provide positive reinforcement that the company is close to firing on all cylinders,” he said in a note Wednesday.

Midstates shares closed up more than 14% Wednesday at $5.72 after heavy trading.

Total company production has averaged 29,200 boe/d for the last two weeks. Midstates also confirmed its third quarter production guidance range of 27,000-28,000 boe/d as well as its capital expenditure guidance of $170-180 million.

“We continue to benefit from increased drilling efficiencies, which are helping us to get our wells drilled more quickly,” said Crum. “Even with the wells that we have placed online recently that contributed to this production growth, we still have 15 more wells that have been drilled and will be placed online in the next few weeks, primarily because of pad drilling.”

Midstates has five rigs active in its Mississippian Lime horizontal program in Oklahoma. The company spud 15 operated wells and placed 11 operated wells into production since July 1. Drilling is completed on 11 additional wells and they are scheduled to be placed on production in the next several weeks. Midstates now has 98 producing wells in the play that have experienced an approximate average 30-day initial production rate of 583 boe/d.

In Louisiana, the company recently completed and is currently testing the second successful horizontal well at its South Bearhead Creek field, the Musser Davis 27 HC-1. The well reached a total depth of 19,208 feet, with a 4,733-foot lateral targeting the Lower Wilcox D. The well was placed on production earlier this week and is producing at a restricted rate of 967 boe/d (more than 80% oil). A rig is currently drilling the Wood 10H-1 horizontal sidetrack at North Cowards Gully.

“We remain completely focused on execution across our three core areas and are very pleased with our results as highlighted by the growth in volumes,” Crum said. “Our second horizontal success at South Bearhead Creek is very encouraging for the further development of that field. This well targeted a deeper Wilcox sand but was drilled more quickly and at a lower cost than the first well.”