Saturday, August 14, 2010

Devon Energy Corp. (DVN): Granite Wash Update

Devon Energy Corp. (DVN) is stepping up their position in the Granite Wash and plans to drill 16 Granite Wash wells by the end of 2010. President and CEO John Richels reports:

"Although we have not talked much about our Granite Wash position in the past, we delivered some very encouraging results there during the second quarter. We brought two Devon-operated Granite Wash wells online with an average 24-hour IP of 29 million cubic feet equivalent per day, including 585 barrels of oil or condensate and 1,330 barrels of NGLs. With the recent success in both the Cherokee and Granite Wash A sands, we are stepping up our activity in the area. We currently have two rigs running in the play and plan to add a third rig that we will move from the Barnett later this month. We have an inventory of about 150 Cherokee and Granite Wash A locations and 200 additional undrilled locations and other Granite Wash formations. Since we hold our position in the Granite Wash with existing production, we are under no pressure to drill. However, given the attractive rate of returns generated by these wells in this environment, we are reallocating capital to this play. We now plan to drill 16 Granite Wash wells this year."

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