Newfield off to strong start in 2017 shale production efforts

By Luke Geiver | May 09, 2017

Newfield Exploration has gotten off to a great start in 2017, but the SCOOP/STACK- and Williston Basin-focused operator still has a lot to learn, according to Lee Boothby, chairman of Newfield. In the first quarter, Newfield’s 2017 net production has already exceeded the mid-point domestic guidance range for the year by roughly 6,000 barrels of oil equivalent per day. Better production in the SCOOP/STACK and the continued production in its Bakken resources has helped the company raise its 2017 production guidance by 7 percent or 4,500 boped to a total of 148,600 boepd.

In addition to a production guidance increase for 2017, Newfield has also upped its 2017 capital budget. With the addition of $100 million, Newfield will spend more on activity levels in its main drilling areas in the SCOOP/STACK. The money will also be used to test prospective horizons there. Newfield has named the additional testing effort SCORE in reference to well drilling and testing it will perform on the geologic formations of the Sycamore, Caney, Osage. Newfield’s enhanced completion work in Oklahoma includes higher proppant and water volumes, increased frack stages, the use of diverters and dissolvable plugs and fluid chemistry to reduce friction downhole.

With $500 million worth of cash on hand, Boothby said the company has no interest in selling its Williston Basin assets. Boothby told investors that his team loves its Bakken assets. Newfield has 300 plus locations in the Bakken and the company considers them all to be great assets.

For the remainder of the year, the focus for Newfield will be in the SCOOP/STACK, where roughly 80 percent of its capital will be spent. “Newfield and our STACK peers are all working to solve the same equation: how do we create the most value through optimal well spacing and completion designs at today’s oil prices and service costs,” he said.

Results from recent wells show that the company could consider increasing its type curve projections to above 1.1 mboe, but Boothby asked investors to allow the company to gain more information and give future projections more time before it changes its well production projections.

While the company will continue to emphasize its production development learnings, Boothby said it will also continue to invest in water infrastructure. In March, Newfield broke ground on a water recycling facility in Kingfisher County, Oklahoma. Boothby said his team was considering water recycling 15 years ago before it was “cool” to do so.

In the future, Newfield hopes to increase the value of its assets by growing their scale and by accelerating the development and production from them. “Going faster and accelerating that future state forward is what we’ll be focused on,” he said.