Laredo:
Cline Shale
March 26, 2012 |
Devon:
Cline Shale
April 4, 2012 |
Range:
Cline Shale
March 27, 2012 |
Concho:
Cline Shale
April 2, 2012 |
Laredo Petroleum produced 26,270 boe/d in Q411. In the Permian, LPI has 135,000 acres (mostly Glasscock and Reagan counties) and now has 12 rigs running (4 horizontal, 8 vertical). In the Cline (26 wells drilled), work has moved beyond exploration to early development. Slide above shows actual Cline shale results from mix of lateral length, frac stage, and sand quantities. LPI now evaluating results of increased # of fracs and will test longer 7,000' laterals in 2012. |
The Cline is an organic rich shale with inter-bedded silt/sands. It is below the Wolfcamp and 200' to 550' thick. DVN now has 500,000 acres in the emerging play with an unrisked resource of 3.6 Bboe. In 2012, Devon plans to drill 15 Cline wells and ramp to 4 rigs by year end.
Currently, Devon is drilling its Stroman Ranch C-5H well in Sterling County, TX. DVN's Cline metrics are D&C costs of $6.5MM, EURs of 570MBoe (85% liquids) and IP's (30 day) of 600 Boe/d. |
Recent data shows that Range has 100,000 Cline oil shale acres (91% HBP) largely concentrated in Sterling County, TX. To the west in Glasscock County are industry leaders like Apache, Concho, Laredo and Energen. RRC presents development economics based on 340 Mboe EUR (1 well) comprised of 210 Mbbl oil, 71 Mbbl NGLs and 353 MMcf gas. D&C costs (3,000' lateral and 10 stage frac) are $4.3 MM. NPV10 at 1/31/12 pricing is $3.7MM. IRR is 41%. |
Concho presents a great time series of the E&P in the Permian basin from discovery to the "Renaissance Phase". Permian oil production peaked in 1973 at 2.085 MMbbl/d, declined to .85 MMbbl/d in 2007, and is now ramping north of 1.0 MMbbl/d. CXO is a Permian leader with 125 Mboe/d gross operated production. Slide above shows the "New Play" in the North Midland basin (including Wolfcamp/Cline shale) where CXO has 60,000 acres and is actively leasing more. |
