Hitting the Accelerator on Development

Transcription

1 Hitting the Accelerator on Development University Lands Partner Forum Nitin Chowdhury Shell 1

2 Shell Position in Delaware Basin Permian position acquired in 2012 from Chesapeake Energy Approximately 250K net acres in Delaware basin Operatorship split between Shell and Anadarko University Lands ~ 32K gross acres, with Shell as the operator Shell Leases UL Acreage 2

3 Gross Production (Kboe/d) / WTi Oil Price ($/bbl) University Lands Production (Kboe/day) Shell Operated Permian Production from 2015 Present Pre WTI Oil Price University Lands % increase in 1 year Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan

4 % of Wells Strategic Shift to Development Over Time 100% 80% Single well Pads Multi-well Pads From 2015 to 2017, activity moved from leasehold and appraisal to development 60% Higher emphasis on near-term cashflow 40% Organizational focus on well delivery process, 20% execution learning curves, savings from 0% repeatability etc. 4

5 Proppant Intensity lb/ft EUR/well - mboe Rig Count Drivers to Production Growth - Better wells and Higher Activity Bigger Completions Higher EUR/well Increasing Rig Count 8 +83% % Proppant intensity increasing with time Inline with majority of the industry Trials ongoing at higher proppant intensity Steady growth in EUR/well Longer average lateral length Shift to higher proppant intensity completion Better estimate of well performance with longer term data Increasing activity levels over the last couple of years as the asset has moved into development 5

6 Drill Cost ($MM) Lateral Length (ft) Average Cum Oil per Well (Mbo) Lower Cost Structure & Better Wells Over Time Drill Cost ($MM) Lateral Length Wolfcamp A Wells Over Time % YTD Producing Days Drilling efficiencies Benchmarking and learning from partners/peers More predictability & repeatabilty with move to development Longer laterals, bigger completions Focus on high graded acreage Debottlenecking of surface constraints 6

7 Balancing Derisking with Development 1 st Bone Spring 2 nd Bone Spring 3 rd Bone Spring WC X/Y WC A WC B Development focus on 3 rd Bone Spring, Wolfcamp X/Y and Wolfcamp A intervals Need to think of all targets with small vertical separation as part of a package Continuing to de-risk other targets at a measured pace through drill bit and through industry data WC C 7

8 Balancing Technical & Economic Drivers for Well Spacing Reduction in individual well EUR s as well density increases Well spacing interdependency between different benches Interference effects may not be apparent early in the production history Finding the right answer takes too long and changes with external factors Multiple well spacing trials planned in early development to further our understanding of well to well interactions 8

9 Technology Application Efforts Ongoing Instrumentation Completions Optimization L1 A B C-D E W1 W2 Wcmp A Wcmp B Wcmp B Landing Depth Optimization Modeling 9

10 Infrastructure Being Built Ahead of Production to Minimize Trucking 100% 80% % Produced Water Piped Piped Produced Water Trucked Produced Water Big focus on reducing trucking to minimize HSE exposure and reduce costs 60% 95% + water production piped from overall operations 40% Major Infrastructure already operational on 20% University Lands 0% Trucking only used during initial flowback period and as contingency on University Lands 10

11 University Lands Surface Infrastructure Reduce Recycle Reuse SWD Infrastructure Currently have 3 SWD facilities & 5 SWD injection wells Plans for additional 3 SWD facilities and 6 SWD injection wells Colt CPF Bobcat CPF Central Processing Facilities One CPF currently operational Another CPF expected online end Q Recycle Facility Frac Pad Water Recycle Facility Plans Off-lease GW supply GW PW Chemical Treatment Expected online end Q Sea Hawk SWD PW Chemical Treatment / Optional TBD PW 11

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