During their 2nd quarter 2014 conference call, WPX Energy reported on their earnings and exploration efforts. With respect to the company’s Niobrara Shale efforts, WPX spud two wells in the first half of 2014 – a horizontal well and the company’s second vertical test well since late 2013. Both wells are scheduled to begin completion operations in August. The company has three other Niobrara horizontal wells and a vertical well on production. The horizontal discovery well has produced 2.7 billion cubic feet in cumulative gas volumes in just over 18 months.
During the conference call, CEO – Rick Muncrief said that WPX considers the Piceance Basin to be undervalued, and that the company will be starting completion operations in late August on their Niobrara wells. WPX will be capitalizing on their vertical wells in the Niobrara and has completed some horizontal wells in an over pressured area that is operationally challenging. WPX likes the pressure, likes the rock, and it’s a ” just a matter of being able to efficiently execute”. WPX is considering longer laterals which could be a game changer for the prospect. The company considers its current handful of Niobrara completions to be sub-optimized and declined to make any projections on future well completions as the area is still in the exploration phase.
With regards to its Colorado acreage position, WPX sees an impact of less than 5% on their 12,475 drillable locations in the event of a 2000 ft. drilling setback was enacted. [via a constitutional amendment or new state regulation] [Regulations are currently 500 ft from fixed structrures, with 1000 ft setbacks for high density areas].