Multi-zone development drives Devon Energy in STACK, Delaware

By Patrick C. Miller | November 07, 2017

Oklahoma City-based Devon Energy Corp. reported that during third quarter, it brought on 50 high-rate wells with average production rates exceeding 2,100 barrels of oil equivalent per day (boepd), while cutting capital expenditures 12 percent below guidance.

“A key driver of our operational momentum is the advancement of multi-zone development activity across our world-class STACK and Delaware Basin opportunities,” said Dave Hager, Devon president and CEO. “With several projects underway, this cutting-edge development technique will optimize per-section recoveries, while improving capital efficiencies by 20 percent.”

Devon’s net production in the third quarter averaged 527,000 boepd. This result exceeded the midpoint of the company’s Hurricane Harvey-adjusted guidance by 6,000 boe per day. Of this total, oil production accounted for the largest component of the company’s product mix at 44 percent of total volumes.

The majority of Devon’s production was attributable to its U.S. resource plays, which averaged 403,000 boepd during the third quarter. Storm-related curtailments reduced production in the U.S. by approximately 15,000 barrels per day (65 percent oil) in the quarter, with the most significant impact in the south Texas Eagle Ford play. The strongest asset-level performance in the quarter was from the company’s STACK assets, where production advanced 26 percent compared to 2016 exit rates.

Hager said that for the third quarter, Devon had some of the best drill-bit results in its history, delivering 50 new, prolific wells with a capital investment below company guidance for a third consecutive quarter.

“We continue to deliver outstanding well productivity from our U.S. resource plays as we execute on our development plans,” he said. “With these strong results, we remain on track to achieve our 2017 exit rate production targets, and we are positioned to deliver attractive, high rate-of-return growth in 2018.”

The company’s drill-bit productivity included 14 new Meramec wells brought online in the STACK play that achieved average 30-day rates of greater than 2,300 boepd (55 percent oil). The Delaware Basin also delivered several high-rate oil wells. Four new Bone Spring wells around the state-line area of southeast New Mexico attained 30-day rates of 1,750 boepd (75 percent oil).

According to Devon, publicly available data during the past year shows that its 90-day production rates from new wells have achieved the highest rates of any U.S. onshore operator.

With operations fully restored from storm-related impacts, Devon said it remains on track to achieve its full-year 2017 target for U.S. oil production. Based on higher activity levels for the remainder of the year, the company forecasts its U.S. oil production from retained assets to exit the year at levels approximately 20 percent higher than the fourth quarter of 2016.