Newfield Exploration Company - Mid Continent (Anadarko and Arkoma Basins)
Percent of 2009 Total Company Reserves: 55%
Percent of 2010e Total Company Production: 42%
Percent of 2010 Capital Budget: 37%
Location:Headquarters in Tulsa, Oklahoma, with operations in southeastern/western Oklahoma and the Texas Panhandle.
Focus: Long lived, unconventional resource plays.
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The Mid-Continent has been our fastest growing region over the last several years. We have been active in the Mid-Continent since 2001 and have tripled our proved reserves and production since that time. This region provides longer-lived reserves and has lengthened our overall reserve life index.
We are focused primarily in the Anadarko and Arkoma Basins. At the end of 2009, we owned interests in nearly 900,000 gross acres (approximately 400,000 net acres) and approximately 2,000 gross producing wells. This region is characterized by longer-lived natural gas production. The two most active plays, the Woodford Shale and the Granite Wash, have extensive prospect inventories, large acreage positions and a multi-year inventory of lower risk drilling opportunities. As of May 2010, operated production in the Mid-Continent was more than 340 MMcfe/d net and our 2010 plans call for 8 to 10 rigs.
Woodford Shale: Our largest single investment area over the last several years has been the Woodford Shale, located in the Arkoma Basin of southeast Oklahoma. The Woodford is a shale formation that varies in thickness from 100 to 200 feet throughout our acreage. Our activities began in this area in 2003. At the end of 2009, we owned interests in 166,500 net acres. Our average working interest is approximately 60%. Since 2003, we have drilled more than 100 vertical wells and approximately 325 horizontal wells. We expect to run four to six operated rigs throughout 2010.
Our 2009 production in the Woodford Shale was 26% higher than our 2008 production, despite voluntary curtailments of approximately 3 Bcfe of natural gas production related to low gas prices in the third quarter of 2009. As of May 2010, our operated production in the Woodford Shale was more than 200 MMcfe/d net.
In mid 2010, we elected to allocate an additional $200 million to oil projects. As a result, we plan to reduce our operated rig count in the Woodford. We expect our production in the Woodford Shale to grow about 20% during 2010. Substantially all of our acreage is held-by-production. Our development plans for the field include drilling a thousand or more wells on primarily 40-acre spacing. We have improved efficiencies in the play through the drilling of horizontal wells with longer lateral completions. Our average lateral length has doubled since 2006 to a 2009 average of approximately 5,000’. We expect our average length will be over 6,000’ in 2010.
Granite Wash: We are active in the Granite Wash play located in the Anadarko Basin of northern Texas and western Oklahoma and have more than 44,000 net acres in the play. Our largest producing field in the Granite Wash is Stiles/Britt Ranch, where we operate and own an average 75% working interest. Although we have approximately 150 producing vertical wells in Stiles/Britt Ranch, our recent efforts have shifted to horizontal drilling. Since late 2008, we have drilled and completed 19 horizontal wells in the Granite Wash and the average initial production for these wells was 19 MMcfe/d (gross). During 2009, we ran three to four operated drilling rigs in the field. We expect to run four operated rigs in the Granite Wash in 2010. Production as of mid-May 2010 was approximately 120 MMcfe/d net from the Stiles Ranch. We expect to continue this level of activity in the Granite Wash, and expect our production in the Granite Wash to grow more than 25% during 2010. We have an inventory of approximately 250 locations in the Granite Wash.