Devon Energy Announces Resource Expansion in the Delaware Basin with Successful Leonard Shale Spacing Test
Devon Energy Corp. (NYSE: DVN) announced today an increase to its risked
drilling inventory in the Delaware Basin following a successful Leonard
Shale stacked spacing test in southeast New Mexico.
The Thistle spacing pilot tested 400-foot vertical spacing between the
Leonard Shale “B” and “C” intervals in the southwest corner of Lea
County, New Mexico. Initial 30-day production rates from this two-well
pilot averaged 1,800 oil-equivalent barrels (Boe) per day per well, of
which 75 percent was light oil. The Thistle wells were drilled with
7,000-foot laterals at a cost of about $6 million per well.
Early results from the Leonard Thistle pilot also indicate minimal
interference between wells, suggesting potential for joint development
of multiple intervals in this portion of the Leonard play. With the
success of this stacked spacing test, Devon is now raising its risked
inventory in the Leonard Shale to 950 gross locations. This increase in
risked inventory represents growth of nearly 20 percent from previous
estimates and conservatively assumes only six wells per surface section.
The company expects its risked inventory in the Leonard to continue to
expand with further delineation work.
Overall, the company has 60,000 net surface acres in the Leonard Shale
play, with gross pay ranging up to 1,100 feet and as many as three
different landing intervals. Adding up the Leonard leasehold by target
landing interval, Devon has exposure to 160,000 net effective acres.
This early-stage development play has potential for greater than 1
billion Boe of recoverable resource.
“The strong flow rates from the Thistle spacing pilot is another example
of the positive rate of change we are achieving in the Delaware Basin
and is another critical step in further delineating the massive resource
upside associated with our North American onshore portfolio,” said Tony
Vaughn, chief operating officer. “In the upcoming year, we plan to
continue to accelerate drilling in our world-class Delaware Basin and
STACK assets. We expect this increased activity to deliver strong growth
in high-margin production and further expand our recoverable resource in
the U.S.”
Delaware Basin: A Multi-Decade Growth Platform
Devon has one of the best Delaware Basin positions in the industry with
stacked-pay potential providing exposure to the Delaware Sands, Leonard
Shale, Bone Spring, and Wolfcamp formations. The company’s position is
extremely well positioned on the North American cost curve. In
aggregate, the company has exposure to 670,000 net acres by formation,
with nearly 6,000 risked undrilled locations and greater than 20,000
unrisked locations in this basin.
Converting the massive and growing opportunity in the Delaware Basin
into production and free cash flow is a top priority for the company.
Devon remains on track to accelerate drilling activity to three operated
rigs by year end 2016. Depending upon cash flow availability, the
company has the potential to further ramp-up activity to as many as 10
rigs by the end of 2017. This increase in drilling activity will focus
on the Bone Spring, Leonard Shale and Wolfcamp targets.
About Devon Energy
Devon Energy is a leading independent energy company engaged in finding
and producing oil and natural gas. Based in Oklahoma City and included
in the S&P 500, Devon operates in several of the most prolific oil and
natural gas plays in the U.S. and Canada with an emphasis on a balanced
portfolio. The Company is the second-largest oil producer among North
American onshore independents. For more information, please visit www.devonenergy.com.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the federal securities laws. Such statements are subject to a
number of assumptions, risks and uncertainties, many of which are beyond
the control of the Company. These risks include, but are not limited to
our ability to replicate the results described in this release for
future wells; all the other uncertainties, costs and risks involved in
exploration and development activities; and the other risks identified
in the Company’s Annual Report on Form 10-K and its other filings with
the Securities and Exchange Commission (the “SEC”). Investors are
cautioned that any such statements are not guarantees of future
performance and that actual results or developments may differ
materially from those projected in the forward-looking statements. The
forward-looking statements in this press release are made as of the date
hereof, and the Company does not undertake any obligation to update the
forward-looking statements as a result of new information, future events
or otherwise.
The SEC permits oil and gas companies, in their filings with the SEC, to
disclose only proved, probable and possible reserves that meet the SEC's
definitions for such terms, and price and cost sensitivities for such
reserves, and prohibits disclosure of resources that do not constitute
such reserves. This press release contains certain terms, such as
recoverable resource, risk and unrisked locations and other similar
terms. These estimates are by their nature more speculative than
estimates of proved, probable and possible reserves and accordingly are
subject to substantially greater risk of being actually realized.
Investors are urged to consider closely the disclosure in our Annual
Report on Form 10-K and other SEC filings.
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