Monday, December 11, 2017

Conoco Has Upside In 2018 -- One Of Its Best Leaseholds Is North Dakota -- Filloon -- December 11, 2017

Link over at SeekingAlpha:
  • COP 2016-2017 locations produce 29% more oil than in 2015
  • increased oil production has some to do with better well design, but improved geology in the Permian is also a contributing factor
  • Like most other US unconventional operators, COP is improving oil production per foot
"Improved geology" or "better understanding of the geology"?


From the article:
2017 has shown gains in oil production per foot across the US unconventional oil industry. Better stimulation in concert with increased sand and fluids usage continues to decrease payback times. Operators can complete fewer horizontals to increase production. As the marginal producer, E&Ps can increase production quickly at higher prices and reduce the number of completions when WTI pulls back. This may cap oil prices in the short term, but provides flexibility during periods of volatility. West Texas Intermediate and the US Oil ETF continue to head higher, and we expect this to continue through next year.
Conoco continues to improve design. It has excellent Eagle Ford acreage, where both EOG and Devon have seen a number of monster wells. In 2012, COP was using 3.5 million lbs of sand and 70 clusters. In 2017, it uses over 15.5 million lbs and 300 clusters. The Delaware could have the most upside of its plays, as the economics continue to show promise. It has one of the best leaseholds in North Dakota [through BR].

From the article, based on 178 Conoco horizontals completed after January of 2016. Ninety-nine locations are in Texas, 73 in North Dakota and 6 in New Mexico. New Mexico has the best oil curve, producing 278 KBO in 17 months. North Dakota and Texas are 2nd and 3rd:

DeWitt (52) had the greatest number of completions. McKenzie (43), Dunn (30), and Karnes (23) round out the top four by number. 

These four counties account for more than three-fourths of the total. Eddy has the best oil curve, producing 326 KBO in 13 months. McKenzie, Ector, Lea, Karnes, DeWitt, and Dunn are the next best oil producing counties.

The average COP location produces 178 KBO and 422 MMcf in 16 months.

No comments:

Post a Comment