Two independent producers unveiled their capital expenditure budgets this week and gave an early update on production guidance for 2014 in basins stretching from Texas to the Rocky Mountains.
Newfield Exploration Co., which continues to transition its focus from offshore drilling to onshore domestic resources, plans to invest approximately $1.6 billion in development in the Midcontinent, Rocky Mountains and Texas. That figure is essentially unchanged from the $1.9 billion it dedicated to its programs this year.
Laredo Petroleum Holdings Inc., a pure-play Permian operator, said its board of directors had approved a $1 billion capital budget for next year, up from the $725 million it spent this year on development in its Permian Garden City assets, including the upper, middle and lower Wolfcamp and Cline shale zones it worked to delineate in 2012.
An analysis from Tudor, Pickering, Holt & Co. (TPH) last month found that 100 additional rigs will be moved to the U.S. onshore throughout 2014, with about half headed to the Permian Basin as activity there continues to heat up (see Shale Daily, Nov. 19). Analysts at TPH said that while some of the largest onshore operators will likely cut capital budgets next year as they work to bring a backlog of wells online, smaller independents and midcap companies are poised to increase spending with more cash on hand.
Newfield said it expects continuing operations in 2014 to bump up net production by 10-20% above its 2013 guidance. The company said that $1.6 billion excludes interest and overhead costs.
Newfield CEO Lee K. Boothby said the company will increase its investments in its scoop and stack plays in Oklahoma's Anadarko Basin, where he said results have been "very strong to date." Newfield will dedicate $700 million to the Anadarko, where it holds 225,000 net acres in a region that it expects to produce 50,000 boe/d next year.
Newfield will spend $400 million in the Uinta Basin. It eventually has plans for 200 wells there, and it will maintain its four-rig program with $330 million in the Williston Basin. Newfield will focus on extended laterals of up to 7,500 feet in North Dakota on multi-well pads. The company also plans on investing $170 million in the Eagle Ford, while overall, Newfield said it expects to operate more than 17 rigs next year.
Laredo, meanwhile, said it's started to implement multi-zone development by building out several production corridors to support more efficient, multi-well pads that it says will bring down costs in the Permian Basin. The company said its $1 billion capital budget will be funded with internal cash flow and borrowings from its existing credit facility.
Just like this year, Laredo will continue to focus on horizontal development in the upper, middle and lower Wolfcamp and Cline shales, primarily with two to four stacked lateral multi-well pads. Laredo said it expects to operate 6-7 rigs that it anticipates will drill up to 75 wells in 2014. The company will continue delineating acreage on its 142,000 acre position, as well. It will drill up to 125 conventional wells for data gathering and lease maintenance obligations.
Laredo said it expects total annual production to be near 34,800 boe/d.