E Bakken Update: How And Where To Invest In The Delaware Basin Part 3

<<Read Part 1: Bakken Update: How To Invest In The Delaware Basin

<<Read Part 2: Bakken Update: How And Where To Invest In The Permian

The Delaware Basin remains one of the top US unconventional basins. It rivals the STACK/SCOOP in Oklahoma and Midland Basin just to the east.West Texas geology is superior for several reasons. 

The rock is exceptional, and seems to stimulate better than other areas of the country. This means that when fracked, it breaks up better, letting loose resource.Newer Mega-Frac completion styles are working so well that up to 3,000 lbs. of sand are needed per foot. Operators all have different completion methods, but even the most conservative are still using more than 2,000 lbs/ft.

This benefits frac sand producers. These include US Silica (SLCA), Emerge (EMES), Hi-Crush (HCLP), and Fairmount (FMSA).This could be just the beginning, as operators continue to get better. These big frac jobs also have controlled frac lengths. So the fractures do not push as deep into the shale. It should allow operators to place locations closer together without worry of excessive well communication.

(source: Matador)

The Wolfbone is one of the most successful unconventional vertical oil plays in the US, and possibly the world. It is targeted in the southern Delaware, but is a possible play in the north too. It covers roughly 4,100 feet from the Brushy Canyon to the deepest Wolfcamp interval. 

http://www.oilandgas360.com/wp-content/uploads/2014/04/Pages-from-Investor_Presentation-31.jpg?94b0a9

(Source: OilandGas360)

The Wolfbone has been targeted in southeast Reeves and northwest Pecos.It is possible this will extend further north and south from its initial locations.Operators like Anadarko (APC), BHP (BHP), Clayton Williams (CWEI), Energen (EGN), Occidental (OXY), and others have all drilled and completed Wolfbone wells.It provides infill upside in leasehold currently not seeing activity. 

Anadarko is more DJ Basin focused, spending $1.3 Billion. Of its $3.6 billion total 2016 cap ex, $800 million will be spent on the Delaware Basin. 

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Data for the above article is provided by welldatabase.com. This article is limited to the dissemination of general information pertaining to its advisory services, together with access to additional ...

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