Unconventional plays in North America will be ConocoPhillips' priority going forward, with the focus on fields rich in liquids and oil, CFO Jeff Sheets said Wednesday.
U.S. and Canadian gas production is "a shrinking part of the portfolio," but the company has more than enough onshore work in unconventional oil plays to remain busy, he told financial analysts during a conference call.
Reaffirming comments by CEO Jim Mulva in March, Sheets outlined the company's strategy in North America, which will be to pursue oily shales in the United States and oilsands in Canada (see Daily GPI, March 24).
The explorer today is concentrating its U.S. onshore efforts in the Eagle Ford, North Barnett and Bakken shales. The most promising, said Sheets, is the Eagle Ford leasehold, where the company is producing around 20,000 boe/d; at the end of March output was 71% weighted to liquids.
"We remain encouraged by the results in Eagle Ford," he said. "The early results were better than expected; production has not declined as fast as we had premised." By the end of this year ConocoPhillips plans to be running 14 rigs there.
"We're also active in liquids-rich areas of the Bakken, North Barnett and Permian [Basin]. We have 10 rigs [total] in those areas, and will be up to 12 this year." Encouraging results also are expected from the Wolfcamp leasehold in the Permian Basin. The company acquired 33,000 net acres in the play during the latest quarter from an undisclosed seller.
ConocoPhillips now has 20 rigs running in the U.S. onshore. "All of the Lower 48 will have twice as many rigs by year-end than in the first quarter of last year," said Sheets. By the end of this year the onshore plays are expected to produce a total of around 65,000 boe/d.
Sheets was discreet on ConocoPhillips' plans to pursue more onshore properties. However, he said the company was "continuing to evaluate the resource plays we have...for incremental investment opportunities."