Newfield Excited About The Bakken: Wells Down To $8 Million; All-In: $9.8 Million

How many remember this:

November 2, 2011: Newfield wrings its hands over high cost of fracking; says "we've" seen the last of $10 million Bakken wells.

So, what now for Newfield?

This is the headline and lede from Petroleum News:

Well performance boosts Williston production forecast from 15% to 25%; 42 operated wells to be drilled in Bakken, Three Forks this year. The Williston Basin is providing Newfield Exploration with an extra boost in meeting the company’s previously announced plan to double U.S. oil and liquids production by year-end 2015.

From Newfield's 1Q13 transcript: 

In the Williston Basin, we delivered some of our best wells to date during the first quarter. As a result of recent wells and better-than-expected performance from our existing wells, we've increased our growth estimates for the Williston Basin. We now expect our Williston production to grow 25% year-over-year compared to our original target of about 15%.

Our 4 most recent Bakken wells had average initial gross production rates of more than 3,100 barrels of oil equivalent per day and nearly 1,000 barrels of oil equivalent per day over their first 30 days. During the first quarter, we also drilled 2 Three Forks wells with an average gross initial production of nearly 2,400 barrels of oil equivalent per day and they averaged nearly 900 barrels of oil equivalent per day over the first 30 days.

In the Williston, we continued to show well cost improvements, excluding about $900,000 in facility and artificial lift cost, we are now drilling and completing our wells for $8 million to $8.5 million. Our average completed well cost in the Williston for our Super Extended Lateral wells in the first quarter was $8.9 million and we recently drilled and completed a best-in-class well for $7.4 million. Including facility and artificial lift cost, our average gross completed well cost in the Williston in the first quarter were $9.8 million.

Later:

Our drilling teams are capturing efficiencies through the longer laterals and pad drilling, and as we summarized in our operations report last night, our most recent completions in both the middle Bakken and the Three forks are performing very well.

In March, we added a fourth operated rig in the Williston Basin. All of our drilling today is being conducted from multi-well pads. These reduce the time between wells, allow us to simultaneously complete our wells faster and cheaper and we save money with shared production facilities. At our current pace, we expect to drill about 35 operated wells in the middle Bakken and 7 wells in the upper Three Forks this year.

During the first quarter, we completed some of the best wells to date in the Williston Basin. These were not only the highest IP rates we have seen, but more importantly, they captured efficiencies through less drilling days and optimized completion practices.

In our Sand Creek Federal area located in McKenzie county, we completed 2 wells in the middle Bakken and 1 the Three Forks. Our 2 middle Bakken wells have averaged gross initial production of 3,500 barrels of oil equivalent per day and a 30-day average of 1,100 equivalent per day. The Three Forks well has a gross initial production of 3,450 barrels of oil equivalent a day and averaged 1,100 barrels over its 30 days as well. Lateral lengths in these wells were approximately 10,000 feet.

Our returns in the Williston Basin continue to improve through lower completion cost and in the quarter, we drilled a Three Forks wells with a 9,000-foot lateral for $7.4 million. That was a best-in-class well, facilities and artificial lift, add another 900,000 barrels.

Costs are still "iffy," comparing apples to oranges, often:

Q: Okay. So the $9.8 million that you cited was the all-in well cost, including the facilities fees?

A: Yes. We've historically recognized that a lot of times when our well costs are being compared to some of our competitors, that the facilities costs are being left out of some of the numbers. So we wanted to provide you the transparency in the breakdown between facilities and total well costs. So we are clearly seeing advantages this year that we had not even anticipated as we entered the year through additional efficiencies in what is a rather mature play for us. But then we're also providing you the extra clarity on the facility piece of that.

 And all of this before the USGS 2013 survey of the Bakken.

I.N.C.R.E.D.I.B.L.E.