WPX Energy has achieved its second exploratory success of the year, this time from the Mancos Gallup Sandstone formation in the oil window of Northwest New Mexico’s San Juan Basin, company management said during an earnings conference call.

The first four Gallup Sandstone wells flowed at maximum rates of between 488 and 1,004 boe/d, the Tulsa, OK-based explorer said. The company plans to drill eight to 10 more Gallup Sandstone wells this year, three of which are already under way. Drilling activities in the San Juan Basin area are not subject to seasonal closures.

“Based on having more than 31,000 net acres and four successful wells already, we expect resource potential of approximately 66 million boe net to WPX, with approximately 70% of the reserves being oil,” CEO Ralph A. Hill said Thursday. WPX estimates a year-end exit rate of 3,400 boe/d from the new development.

The Gallup Sandstone wells have an average total depth of 5,400 feet, with laterals averaging 4,300 feet.

Success in the San Juan Basin would buck an established industry trend. The basin experienced a sixth straight year of production declines in 2012, according to New Mexico’s Oil/Gas Conservation Commission, which expects the decline to continue this year (see Shale Daily, March 13).

Earlier this year, WPX said that with an average production rate of almost 10 MMcf/d in the first quarter, a discovery well in the Piceance Basin may produce in its first few months what a typical well in the Niobrara formation has done over 25 to 30 years (seeShale Daily, May 6). In its first 180 days, the Niobrara discovery well produced 1.4 Bcf of natural gas, and is currently producing 4.4 MMcf/d at a flowing tubing pressure of about 2,300 psi, WPX said Thursday. The company has finished drilling a second Niobrara well, with completion expected this month, and a third was spud July 12, with completions expected to begin in September. WPX deployed seven rigs on its Piceance acreage during most of the second quarter.

“WPX intends to aggressively delineate this impressive discovery,” Hill said. “We are confident the Niobrara is prospective throughout our 180,000 net acres. We expect to finish a current 3D shoot of 24,000 acres by mid-2014…Management’s plan is to more than double our Niobrara drilling in 2014, with 10-13 wells expected.”

In the Williston Basin, WPX completed nine gross (seven net) wells during the second quarter. Since 2011, the company has completed 100 Williston wells.

WPX also completed 10 gross (seven net) wells in the Appalachian Basin during 2Q2013. The company has one rig deployed in the Appalachian Basin.

WPX reported 2Q2013 adjusted earnings before interest, taxes, depreciation, depletion, amortization and exploration expenses of $210 million, compared with $251 million in 2Q2012. The $41 million decrease was due primarily to lower volumes for both natural gas and natural gas liquids, partially offset by higher domestic net realized average prices.

WPX’s overall production was 1,262 MMcfe/d in 2Q2013, a 12% decrease compared with 2Q2012, but in line with the company’s 2013 forecast. Natural gas production was just over 1 Bcf/d in 2Q2013, down 12% compared with 2Q2012, but WPX said it expects two additional rigs in the Piceance to arrest its gas production decline (see Shale Daily, June 6).