TULSA, Okla.--(BUSINESS WIRE)--WPX Energy (NYSE: 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.
This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the company expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company. Statements regarding future drilling and production are subject to all of the risks and uncertainties normally incident to the exploration for and development and production of oil and gas. These risks include, but are not limited to, the volatility of oil, natural gas and NGL prices; uncertainties inherent in estimating oil, natural gas and NGL reserves; drilling risks; environmental risks; and political or regulatory changes. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. The forward-looking statements in this press release are made as of the date of this press release, even if subsequently made available by WPX Energy on its website or otherwise. WPX Energy does not undertake and expressly disclaims any obligation to update the forward-looking statements as a result of new information, future events or otherwise. Investors are urged to consider carefully the disclosure in our filings with the Securities and Exchange Commission, available from us at WPX Energy, Attn: Investor Relations, P.O. Box 21810, Tulsa, Okla., 74102, or from the SEC’s website at www.sec.gov.
Additionally, the SEC requires oil and gas companies, in filings made with the SEC, to disclose proved reserves, which are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible – from a given date forward, from known reservoirs, under existing economic conditions, operating methods, and governmental regulations. The SEC permits the optional disclosure of probable and possible reserves. From time to time, we elect to use “probable” reserves and “possible” reserves, excluding their valuation. The SEC defines “probable” reserves as “those additional reserves that are less certain to be recovered than proved reserves but which, together with proved reserves, are as likely as not to be recovered.” The SEC defines “possible” reserves as “those additional reserves that are less certain to be recovered than probable reserves.” The Company has applied these definitions in estimating probable and possible reserves. Statements of reserves are only estimates and may not correspond to the ultimate quantities of oil and gas recovered. Any reserve estimates provided in this presentation that are not specifically designated as being estimates of proved reserves may include estimated reserves not necessarily calculated in accordance with, or contemplated by, the SEC‘s reserves reporting guidelines. Investors are urged to consider closely the disclosure in our SEC filings that may be accessed through the SEC’s website at www.sec.gov.
The SEC’s rules prohibit us from filing resource estimates. Our resource estimations include estimates of hydrocarbon quantities for (i) new areas for which we do not have sufficient information to date to classify as proved, probable or even possible reserves, (ii) other areas to take into account the low level of certainty of recovery of the resources and (iii) uneconomic proved, probable or possible reserves. Resource estimates do not take into account the certainty of resource recovery and are therefore not indicative of the expected future recovery and should not be relied upon. Resource estimates might never be recovered and are contingent on exploration success, technical improvements in drilling access, commerciality and other factors.