Devon Energy Corp. (DVN): Avalon Shale Update

By Andrea: http://oilshalegas.com

Devon Energy Corp (DVN) has been building a position in the Avalon Shale play recently. To date, they have assembled 235,000 perspective net acres in this conensate and liquids-rich gas play. Although they are still in the early evaluation of the play, initial drilling results indicate an attractive, repeatable play with outstanding economics. The best wells Devon Energy has drilled to date, have IP-ed at over 500 barrels of condensate per day, 500 barrels of NGLs per day and 3 million to 5 million cubic feet per day of gas. Well costs in the play run between $3.3 million and $4 million. Devon expects Avalon wells to have average IPs of 300 barrels of condensate per day, 300 barrels of NGLs per day and 2 million cubic feet of gas per day in the heart of the play. They expect per-well recoveries to average over 600,000 barrels of oil equivalent. They believe Avalon shale has great return potential and they plan to participate in 32 Avalon wells by the end of 2010, 20 of which they will operate.

As of June 30, 2010 Devon assembled more than 700,000 net acres of leasehold targeting the Avalon Shale, Bone Spring, Wolfberry and other conventional formations. Devon is currently running 11 rigs to de-risk and develop its Permian Basin acreage position.

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