During the first quarter, Newfield Exploration Co. continued to ply its SCOOP (South Central Oklahoma Oil Province) and STACK (because of stacked pay zones) plays in Oklahoma, where the company is enjoying high rates of return and rapid liquids growth, Newfield COO Gary Packer said Wednesday.

“The SCOOP and STACK plays have certainly received a tremendous amount of attention in recent months [see Shale Daily, April 11]. In fact, there are more than 35 industry rigs running in these plays today…,” Packer said during an earnings conference call. “We still expect to exit 2014 with nearly 50,000 boe/d of net production. The Anadarko Basin will receive nearly half of our 2014 capital investment this year. We remain extremely excited about our results to date and see the Anadarko Basin as capable of driving our corporate growth in cash flow and production well beyond our three-year plan.”

Newfield is running eight rigs in the Anadarko and plans to invest $700 million there this year. Net production is expected to double from a year ago. Plans are to drill about 70 wells in the SCOOP and STACK plays and exit 2014 with net production of nearly 50,000 boe/d. Newfield’s first quarter Anadarko net production averaged 29,500 boe/d. The company has more than 225,000 net acres there.

Packer said company executives often are asked when they are “going to go faster” in the Anadarko. The answer is that the pace has already quickened substantially and will accelerate further, only thoughtfully.

“Keep in mind, we have moved from one operated rig in 2011, when we drilled our first well in the STACK area, to four operated rigs in 2013, and now we’re up to eight operated rigs to date,” Packer said. “We’ve doubled our investment in the Anadarko Basin over the last year, and we continue to look for more ways to efficiently move dollars toward the basin. It’s easy to go fast; the challenge is doing it efficiently.”

In the SCOOP, Newfield continues to see strong performance from wells and has six of its operated rigs running in the play. “Our SCOOP investments are generating the highest returns in the company today,” Packer said. “We continue to see solid efficiency gains in the SCOOP drilling program. In our first quarter, our drilling costs per lateral foot decreased 17% when compared to our average of 2013.” Newfield has modified casing designs, increased lateral lengths, embraced pad drilling, improved drilling penetration rates and decreased downtime between wells, Packer said.

The company’s Wright development, located in the SCOOP wet gas portion of the play, recently commenced production. The Wright was developed on six-well per section spacing, with super-extended laterals (SXL) of about 7,800 feet. The average initial 24-hour gross production from the five new wells was 2,006 boe/d. About 30% of the initial production stream was oil. The original well was drilled in 2012 to hold the section by production.

The Gregory development, located in the SCOOP oil portion of the play, commenced production from four wells in late 2013. The Gregory was developed on five-well per section spacing and had an average lateral length of 4,950 feet. Initial average 24-hour gross production from the four Gregory wells was 1,545 boe/d. Gross production from the wells averaged 1,346 boe/d, 1,200 boe/d and 1,115 boe/d over 30, 60 and 90 days, respectively. About one-third of the 90-day production stream is oil.

The Mary SXL well, located in the STACK play, had initial 24-hour gross production of 832 boe/d, of which 83% was oil. The Mary had average gross production of more than 650 boe/d over the first 90 days (81% oil).

“Our 2014 STACK program has several objectives: First, we are drilling to hold acreage,” Packer said. “We plan to drill about 20 SXL STACK wells for 2014, and for the next two years our drilling program will be largely dedicated to HBP [held by production] efforts. The second objective is to learn more about the optimal development well spacing. We are placing our wells on adjacent east-west section boundaries and gathering spacing data as we HBP…Third, we are quickly delineating and therefore derisking our acreage. To date, we estimate that our drilling has derisked about one-third of the STACK acreage. Our 2014 program will test the boundaries of our acreage, and we expect to delineate and derisk about 70% of our acreage by year-end.”

The midstream system serving the company’s production was recently upgraded, giving Newfield access to 200 MMcf/d of gas processing capacity. During the first six weeks of the year, about 4,500 boe/d of production had been curtailed. “This [processing capacity] expansion allowed us to return all of our curtailed wells to full production and tie in recent completions,” Packer said. A second processing capacity upgrade this September is expected add an additional 80 MMcf/d of capacity.

“During the second half of 2014, we’ll be drilling our first operated wells in north SCOOP. This is about 40,000 net acres that sit north of SCOOP and south of STACK,” Packer said. “There are 10 industry-operated rigs running in this area today. We have participated in several wells to date and are very encouraged by the early returns we are seeing. Stay tuned for more information from us later this year.”

Meanwhile in the Uinta Basin, Newfield net production in the first quarter averaged 24,900 boe/d. Uinta production is expected to grow by about 5% this year over year-ago levels. Capital investments are focused on two areas: the waterflood development of the Greater Monument Butte Unit and the assessment of high-potential, horizontal plays in the adjacent Central Basin. Newfield plans to drill up to 15 SXLs in the Central Basin in 2014 to test the Wasatch and Uteland Butte plays. Three of the new wells are now producing and two operated rigs are currently running.

The company’s Williston Basin net production in the first quarter averaged nearly 15,000 boe/d, benefiting from 16 new wells. The company expects this year’s Williston volumes to increase about 40% over 2013 levels. Newfield is operating a four-rig program and expects to drill about 50 wells there this year. “Recent completions continue to show the efficiencies of full-field development and well costs averaged approximately $8.4 million, including about $0.8 million in artificial lift and facilities costs,” the company said.

Eagle Ford net production in the first quarter was nearly 11,000 boe/d. Newfield is running a single-rig program to develop its West Asherton field and Fashing area. Production is expected to stay at current levels throughout 2014 and grow about 30% year-over-year. Newfield expects to drill about 20 Eagle Ford wells this year. Current 7,500-foot lateral well costs are averaging $6.7 million, including artificial lift and facilities costs.

Companywide, net production from continuing operations was 10.7 million boe, which exceeded the midpoint of quarterly guidance by 400,000 boe. Net liftings from discontinued operations totaled about 1 million boe. Domestic liquids production in the first quarter was up 3% compared to the year-ago quarter. Liquids comprised 54% of total first quarter domestic production.

Net income for the first quarter was $284 million ($2.07/share) compared with a net loss of $8 million (minus 6 cents/share) during the year-ago quarter. Net income would have been $60 million (44 cents/share) excluding an unrealized loss on commodity derivatives of $57 million (27 cents/share) and net income from discontinued international operations of $260 million ($1.90/share) which includes the gain on the sale of the company’s Malaysia business.