WPX Energy Inc. plans to deploy two more drilling rigs to the five now running in Western Colorado's Piceance Basin, which should add an incremental 1.9 Bcfe in natural gas-weighted output through the rest of this year, the Tulsa operator said Wednesday.
Previously, WPX had said it planned to use five rigs through this year, but the operator is setting the stage for bigger growth in 2014. The exit rate from Piceance operations was revised upward to 730 MMcfe/d from 701 MMcfe/d, which WPX said was in line with overall company guidance of 1,261-1,265 MMcfe/d.
"Now's the right time for us to accelerate our natural gas production and the Piceance is the right place to start," CEO Ralph Hill. "Natural gas prices are stronger, and this helps lay the groundwork for our 2014 development.
"WPX has a unique position in the Piceance. We have everything in place there to be among the first and fastest to increase our production. We have the permits, favorable processing contracts, take-away transportation capacity and large-scale, low-cost, efficiency-driven operations to yield attractive returns."
In April the management team reported a gas gusher in the Piceance, which it said had exceeded 1 Bcf of production in a little more than 100 days of operation (see Shale Daily, April 9). At that rate the discovery well promised to produce in its first four months what a normal Williams Fork formation well takes a 25- to 30-year life cycle to produce, a spokesperson had said.
On Wednesday WPX said in its first 150 days, the Niobrara discovery well has produced "1.25 Bcf of natural gas and now is producing 5.5 MMcf/d at flowing tubing pressure of about 3,000 pounds per square inch."
In January, WPX foreshadowed the unusual Piceance output when it reported that its first horizontal test well had the potential to more than doubling its proved, probable and possible reserves, which were about 18 Tcf at the end of 2012 (see Shale Daily, Jan. 25).
The benefit of expanding drilling plans in the Piceance this year "will be more fully realized in 2014 given the timing of drilling and well completions. Next year, the additional wells could add up to 15 Bcfe in additional cumulative production," Hill said.
Reserves in the Williams Fork formation are going to be targeted with the new drilling. WPX has developed more than 4,100 tight sands wells already in the Piceance. The company earlier set a a record drilling time for a Williams Fork well in the Piceance Valley of 3.7 days.
The new rigs are going to add about $60 million in capital outlays, but the increase "is in line" with an overall spending estimate of $1-1.2 billion his year. Four horizontals are planned for the Piceance leasehold this year to help delineate the acreage.