American Oil and Gas Reporter - PBIOS 2016 Official Program Guide - 115

vidual zone and how many of these zones
can be developed in any one location,"
he said. "But the number of wells you
can have in a section starts to boggle the
mind."
Additional Efficiencies
Looking at completions, Vaughn says
Devon started increasing the sand loads
in its Delaware wells from 600 pounds
per lateral foot in early 2014 to about
3,000 pounds through 2015. "That gave
us a good feel for the performance change,"
he relates. "It also helped us understand
the matrix associated with the commodity
price environment. We have backed off
from 3,000 pounds in the Delaware Basin.
We think we can get the most commercial
returns at 1,500-2,000 pounds per lateral
foot."
Vaughn also points out that the company's build-out of infrastructure this
year has allowed it to lower operating
expenses from more than $16 a boe to
about $8 a boe.
"We now have power grids to all our
wells," he states. "We also transport the
majority of our fluids by pipe. There are
no take-away issues with the work we
anticipate doing in the next couple years.
So really, the Delaware has caught up to
the infrastructure, and the cost to drill
and complete wells is down. Certainly,
the monthly recurring lease operating
costs are down."
Among the efficiencies Vaughn enumerates are building out Devon's waterhandling capacity across all its fields.
"We own more saltwater disposal capacity
than we ever have had," he continues.
"As we have brought the power grid to
our business, we have been able to release
close to 300 rental generators in the

Delaware Basin alone.
"We have a supply chain group that is
closely linked with our operating team,"
he continues. "It is doing everything from
reducing compression costs to renegotiating contracts. We also are working on
transporting and handling water."
Delaware Basin Expansion
In its second-quarter earnings report,
EOG Resources announced it had expanded its inventory in all three of its
major Delaware Basin formations-the
Wolfcamp, the 2nd Bone Spring, and the
Leonard-organically adding more than
500 premium drilling locations.
EOG completed 16 Wolfcamp wells
in the second quarter with an average
lateral length of 6,500 feet, which was a
44 percent increase from the prior quarter.
Average 30-day initial production rates
were 2,410 boe/d, of which 340 bbl/d
were NGLs and 2.8 million cubic feet a
day were natural gas.
Speaking at the J.P. Morgan Energy
Investor Conference in June, Executive
Vice President for Exploration and Production Lloyd W. "Billy" Helms Jr. pointed
out that a typical Northern Wolfcamp oil
well was 50 percent oil, 24 percent NGLs,
and 26 percent natural gas, while a typical
Reeves County Wolfcamp combo well
produced 31 percent oil, 33 percent NGLs,
and 36 percent natural gas.
He told the conference that EOG had
been able to reduce its Delaware Basin
Wolfcamp oil play costs by 42 percent,
from $11.5 million a well in 2014 to
$6.7 million in 2016.
EOG has 111,000 net acres prospective
to the 2nd Bone Spring Sand in the northern Delaware Basin and 93,000 net acres
prospective to the Leonard Shale. A

Utilizing a development plan it has labeled "total reservoir access concept," President
and Chief Executive Officer Dave Hager says Devon Energy has the potential to develop
up to nine intervals of stacked pay in a given area on its Delaware Basin acreage. Since
2014, Devon has brought on more than 150 wells in the basin with 90-day production
rates averaging 700 barrels of oil equivalent a day.

OCTOBER PBIOS 2016 115

American Oil and Gas Reporter - PBIOS 2016 Official Program Guide

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