December 16, 2016 PETRO SCOUT www.plsx.com E&P Serving the US upstream industry with information, analysis & prospects for sale Volume 27, No. 18 Diamondback doubles down in the Delaware, adds more rigs PDC to drill long laterals in Publicly-listed Diamondback Energy doubled down this week with a $2.4 DJ, integrate Delaware billion acquisition of Brigham Resources’ 76,319 net acres to bring total leasehold PDC Energy is preparing to execute in the sub-basin to 95,499 net acres. In less than six months, in 2017 on moves it made this year to Diamondback has gone from a Midland Basin pure-play enter the Delaware Basin and drill longer to over half of its acreage now in the southern Delaware. This is a remarkable laterals in the DJ Basin after commitment to Permian E&P. The acquisition brings net drilling locations in the consolidating its position. Delaware to 1,500 in the Wolfcamp A The company will spend Adds 1,200 net locations in Southern and B and the Second and Third Bone significantly more in 2017—$725-775 Delaware Basin. Spring in Pecos and Reeves counties. million vs. this year’s $400-420 million— “With Diamondback’s proven ability to execute, we now believe we have the resource and acreage base to efficiently support 15-20 operated rigs,” CEO Travis PDC sets capex at $750 million and Stice said. The company had already planned to add a sixth rig in Reeves County but plans to bring 170 wells online. will now add two more to drill the Brigham acreage. and bring 25 more wells online (170 total). Diamondback says Wolfcamp A EURs on the new acreage are in the top quartile of PDC expects production to increase over its IRRs exceeding 100%, similar to top Midland Basin wells. Continues On Pg 4 40% at midpoint to 82,200-90,400 boe/d. Anadarko adds firepower onshore, hits pay offshore This growth will start slowly with Q1 Anadarko further solidified US onshore plans that will be fueled by cash the volumes flat to 4Q16 but steady growth company expects to generate after increasing Gulf of Mexico investment earlier this beginning in subsequent quarters to exit fall. As it closed its acquisition of Freeport-McMoRan’s deepwater assets this week, 2017 at 97,000 boe/d. PDC projects a 37% the company said it expects to end 1Q17 with 14 operated rigs in the Delaware Basin YOY increase in lateral feet drilled at YE17. and six in the DJ Basin. The company was running seven Delaware rigs and Most of PDC’s 2017 activity will be one DJ rig at the end of Q3 but at its legacy Wattenberg acreage, where added two in each in Q4. Anadarko will run 14 rigs in Delaware it will run three to four rigs and allocate Basin, six in DJ Basin. At the time of the acquisition, 65% of its capex. Continues On Pg 4 CEO Al Walker said assets would generate sufficient cash flow to increase onshore investment and deliver 10-12% five-year compounded oil growth rate in a $50-$60 DEALS FOR SALE oil-price environment. Now, Walker says, “We now believe we have the ability to deliver a five- SOUTH TEXAS NONOPERATED SALE 51-Hz Producing Wells. year compounded annual oil growth rate of 12-14%, while investing within KARNES & DEWITT CO. expected cash inflows.” Continues On Pg 9 EAGLE FORD Vertical Depths: ~12,160-12,240 Ft. PP BP sanctions $9B Mad Dog expansion amid climbing oil prices 20 PUD Locations Identified. Varying NonOperated WI & NRI. NONOP First major Gulf of Mexico project approved since mid-2015 Net Production: 61 BOPD & 86 MCFD The Mad Dog field expansion is officially a go for BP, backing up E&P head 3-Mn Avg. Net Cash Flow: ~$82,000/Mn Bernard Looney’s statement this summer that “Some people say that deepwater is Net Proved PV10: ~$7,000,000 finished. We have a different view.” BP successfully trimmed costs by more PP 1136DV than half to $9 billion from estimates as high as $22 billion in 2013. Chief ANDREWS CO., TX PROPERTY executive Bob Dudley said the Expansion sees $13B price reduction 7-Total Wells. 5-Active. 1-Shut-In. 1-SWD. announcement demonstrates that “big HORIZONTAL SAN ANDRES PLAY from high of $22B. deepwater projects can still be economic ~4,800 Gross/~1,700 Net Acres. PP in a low-price environment in the US if they are designed in a cost-effective way.” Up To 100% OPERATED WI; 75% NRI SAN Net Production: 47 BOPD & 78 MCFD ANDRES Mad Dog Phase 2 will construct a floating production platform to process 140,000 6-Mn Avg Net Cash Flow: ~$60,000/Mn bo/d from up to 14 wells. It is the first major Gulf project to be sanctioned since Wells Have Cumm’d >77 MBOE. July 2015, when Shell moved forward with its 175,000 boe/d, 15-well Appomattox Total Est Reserves: 6.1 MMBO & 3.1 BCF deepwater platform. Other producers have pursued smaller and cheaper tieback OFFERS DUE: JANUARY 26, 2017 projects this year—such as Anadarko at Lucius and Caesar/Tonga—but Mad Dog 2 PP 5900DV is the first big-ticket project. PLS tracks thousands of deals for The Mad Dog platform will be installed 6 miles southwest of the existing truss spar, sale at www.plsx.com/listings which is in 4,500 ft of water. Continues On Pg 10 All Standard Disclaimers & Seller Rights Apply. PETROSCOUT 2 December 16, 2016 Midcontinent Drilling & Production Jones completes 15 Cleveland wells on way to 2016 target of 19 ■ Approach Resources completed Jones Energy’s Q3 was its most active of the year with a resumed three-rig three wells during Q3 in addition to two Cleveland program and an entrance into the STACK/SCOOP. The company spudded 18 previously reported wells completed when wells, completed 15 and brought 13 online in the Cleveland, bringing total wells coming it resumed its completion online to 19 on the year through Sept. 30. program for the first time Jones is increasing the low end of full-year production guidance to 18,600- this year. The latest wells—one Wolfcamp 19,400 boe/d from 17,900-19,400 boe/d driven by well outperformance as well A and two Wolfcamp C—posted an as higher working interest in the Cleveland. average IP rate of 813 boe/d (58% oil). The company raised capex guidance $20 million Regional Oil & Gas Intelligence November 18, 2015 This rate was slightly lower than the first MIDCONTINENT SCOUT to $110 million on higher working interest in the Serving the local market with drilling activity, permits & deals for sale Volume 03, No. 22 two wells—a Wolfcamp B and C, which Continental bullish on STACK, SCOOP performance Regional Activity (State Data) The stars of Continental Resources’ that are three times higher than wells in (11/02/15 to 11/13/15) Q3 production were the company’s normally pressured windows. The Ludwig Compls Permits STACK and SCOOP wells, according to 1-22-15XH had a rate of 2,782 boe/d averaged 861 boe/d (59% oil). Four wells play, up to 85-90% from 80%, and the start-up of Nebraska – 1 its most recent operational update. (76% oil), while the Ladd 1-8-5XH came KansasMidcontinent28 75 Continental completed its Scoutsecond Dec. 8 Oklahoma 6 64 and third STACK wells during the Over-pressured STACK has 3x higher rates than normal-pressure window. North Texas (RRC 5) – 1 quarter and is drilling or completing four North Texas (RRC 7B) 5 28 more. The company says its acreage in the in at 2,181 boe/d (79% oil). Continental awaited completion as of Sept. 30 but North Texas (RRC 9) 13 30 STACK/SCOOP drilling activity. CEO Jonny Jones TX Panhandle (RRC 10) 4 8 trend will “compete head-to-head” with its says 95% of its STACK acreage is in the SCOOP development, which the company over-pressured window. Through YE15, Most Active Operators by Permits says continues to show strong results. the company will operate 2-3 rigs and ➊ Altavista Energy 16 159 Permits;Continental’s 130 wells completed Completions; in the spud an additional 2-3 wells there. ➋ Owens Petroleum 8 said the company began operating a rig on its new ➌ Enervest Operating 6 over-pressured STACK have 90-day rates Continues On Pg 5 won’t come online until 2017. However, Permits by Formation (by Last Scout) Chesapeake’s Oklahoma long laterals include record 9,395 ft During Q3, Chesapeake Energy drilled completed. The company’s multi-section 99Formation Rigs11/18 11/04 Running.10/21 a company record lateral length of 9,395 ft extended laterals that it is drilling in the Squirrel 31 46 38 Mississippian 21 23 34 on its JJJ 23-25-11 1H well, which was in Mississippian Lime save ~$1.4 million Approach said it will drill two wells in Q4. STACK/SCOOP acreage in December. Arbuckle 8 15 15 the completion stages as of the release of per well, a 27% decrease in D&C costs Bartlesville 8 17 6 the company’s quarterly operations update. compared to two separate standard laterals. Barnett 7 5 3 Net production from the Mississippian Woodford 7 14 5 Multi-lateral wells & multi-section extended laterals drilled in Miss. Lime. Lime stayed relatively flat at an average of Cleveland 3 4 6 31,000 boe/d during Q3, a 1% sequential ■ California Resources resumed Granite Wash 3 6 2 Marble Falls 3 4 4 That quarter also saw the first multi- decrease.