Saturday, August 14, 2010

Devon Energy Corp. (DVN): Woodford Shale Update

By Andrea:

Devon Energy Corp. (DVN) released a positive update on the Woodford shale located in western Oklahoma. They are currently in the process of acquiring a significant amount of additional acreage in this play. Most of this new acreage is primarily term and located in the liquids-rich portion of the play. They are currently running nine operated rigs and will bring additional rigs into the play over the next few months to secure the term acreage.

Devon Energy continues to relay excellent results from Cana-Woodford and believes that the field offers some of the best economics among gas plays in North American shale. In the second quarter, they brought 10 operated wells online with average 24-hour IP rates of 6.8 million cubic feet equivalent per day, including 86 barrels of condensate and 350 barrels per day of NGLs.

Second quarter net production from Cana-Woodford averaged a record 105 million cubic feet of equivalent per day, included in 1,000 barrels per day of condensate and 3,000 barrels of NGLs. This was up 43% on a sequential-quarter basis.

They initiated an in-field [ph] pilot program at Cana-Woodford to help them better understand optimal well spacing. This was a joint project with another operator that consisted of nine total horizontal wells being drilled and completed within one square mile. Five of these wells were spaced at 500 feet apart and the other four wells at 660 feet apart. Excluding the first well in the section that had been producing for some time, the average 30-day IP from the eight new wells was 5.4 million cubic feet equivalent per day, including 46 barrels of condensate per day and 245 barrels of NGLs per day.

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