American Oil and Gas Reporter - PBIOS 2014 Official Program Guide - 129

Permian Basin Reports
Upstream

She says the company has more than
5 million gross acres with more than
12,000 gross company-operated oil and gas
wells, and in 2013, the Permian Basin represented nearly 28 percent of Oxy's
worldwide production. She adds that Occidental is producing from every producible formation in the basin.
Much of Occidental's production
comes from enhanced oil recovery. "We
manage our EOR operations and unconventional development through three business units," Hollub details: "one for Permian EOR, which includes carbon dioxide and waterfloods, and two for Permian Resources, which includes growth-oriented unconventional opportunities."
She says approximately 74 percent of
Occidental's Permian EOR business unit's
oil production is from fields that actively
employ CO2 flooding. These operations
make Occidental the largest injector of
CO2 in the Permian and one of the leaders globally.
Like many basin operators, Occidental's Permian Resources business unit is
accelerating its horizontal drilling program,
according to Hollub. "Our 2014 program
is designed to delineate and appraise our
acreage with an eye toward maximizing
both ultimate recovery and financial return," she offers. "We have the required resources and infrastructure in place to
meet Permian Resources' 2016 production
target of 120,000 barrels of oil equivalent
a day."
Occidental drilled 67 horizontal wells
in the first half of this year, of which 43
had been completed and put on production
as of mid-August. Hollub says the company plans to drill 54 more horizontal wells
and place an additional 54 wells on production in the third quarter.
"Oxy's Permian Resources continues
to make significant investments to assess
the rock and fluid properties in unconventional reservoirs across our acreage," she
continues. "This is helping us develop a
better understanding of the key geologic
parameters that drive productivity. These
include porosity, saturation, brittleness, total organic content, mineral and geochemical composition, rock and fluid

compatibility, and fracture distribution and
stress regimes.
"We are applying this appraisal work
to construct calibrated petrophysical models to characterize prospective benches and
target landing zones within each bench,"
Hollub adds. "As a result of our work, to
date we have identified more than 7,000
horizontal drilling locations across 2 million net prospective acres."
Appraising Potential
Hollub says Occidental is conducting
an extensive appraisal of high potential
benches to optimize its well designs and
development plans.
"This includes collecting and analyzing whole cores, cuttings, advanced log
suites, microseismic surveys, and 3-D
seismic surveys," she explains. "We are
leveraging what we learn from participating in more than 450 nonoperated wells
and data from some of the 4,400 wells in
which we have working interests. Based
on our findings, we are testing various field
development and well design alternatives, such as optimizing well spacing, lateral lengths and cluster spacing."
At South Curtis Ranch in the Midland
Basin, Occidental put six wells on production with initial rates of 850 boe/d. "Our
South Curtis Ranch 2818 well achieved a
peak rate of 1,100 boe/d on gas lift," Hol-

Midstream

Downstream

lub points out. "We achieved a 24 percent
reduction in drilling cost through batch
drilling."
At Barilla Draw in the Delaware Basin,
one of Oxy's wells achieved peak production of 1,620 boe/d and 30-day average
production of 1,120 boe/d. That was significantly higher than the company's average 30-day production of 830 boe/d from
prior wells in the Wolfcamp A and B
benches, according to Hollub.
"We are transitioning to an accelerated development phase in Barilla Draw,"
she reflects. "Thanks to the prolific yield
in the Permian Basin, a challenge is
emerging around what to do with all the
new production. Occidental has a unique
competitive advantage as a significant midstream infrastructure operator/marketer
providing key gathering and take-away access to multiple markets."
Planning Ahead
With 24 horizontal and nine vertical
rigs operating in the Permian Basin, one
might assume that Tim Dove's time with
Pioneer Natural Resources would be completely occupied with present activity. But
that isn't the case.
"You have to prepare eight to 10 years
out," he maintains. "The implication is that
if there are four times as many rigs, you
will need four times as much sand and wa-

Occidental Petroleum drilled 67 horizontal wells in the Permian Basin during the first
half of 2014, of which 43 had been put on production as of mid-August. The company
plans to drill 54 more horizontal wells and place an additional 54 wells on production
in the third quarter.

OCTOBER PBIOS 2014 129

American Oil and Gas Reporter - PBIOS 2014 Official Program Guide

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