WPX Energy (WPX) has completed the purchase of another 14,300 net acres in the San Juan Basin’s Gallup oil window from an undisclosed seller for approximately $26 million.
The acreage purchase represents an estimated 100 gross drilling locations, boosting WPX’s tally in the San Juan Gallup to approximately 500.
WPX now owns or controls approximately 100,000 acres in the core of the Gallup oil window where it has spud more than 100 wells following a successful discovery in early 2013.
Since then, WPX has lowered its drilling times on Gallup wells by 75 percent. The company recently drilled two Gallup wells in less than eight days each. During the second quarter, WPX is averaging 9.8 days per well so far.
“We’re very pleased with the productivity of our Gallup wells and our ongoing improvements in drilling times and cost reductions,” says Rick Muncrief, president and chief executive officer.
“This acquisition reflects our confidence in our ability to achieve $4 million well costs and estimated ultimate recoveries of 450,000 barrels of oil equivalent per well,” Muncrief added.
WPX’s overall drilling and completion costs are down 24 percent on its Gallup wells this year compared to its average in 2014. The company reported first quarter Gallup oil volumes of 8,100 barrels per day.
WPX also is increasing its returns in the oil development through the construction of company owned and operated oil, gas and water gathering systems and has taken steps to lower the basis differential on its Gallup oil sales from roughly $13 per barrel to approximately $8 to $10 per barrel.
About WPX Energy, Inc.
WPX Energy develops and operates oil and gas producing properties in North Dakota, New Mexico and Colorado. The company has a long history of innovation and stakeholder engagement, recognized through more than 40 local, state, federal and industry awards.