Newfield to slow the pace of Woodford, Granite Wash development

Newfield Exploration Co. (NYSE:NFX) is reducing its planned gas development wells in the second half of 2010 to emphasize oil plays despite growth of 20% expected in its Granite Wash production this year.

Forty-five percent of its 2010 capital investments, $700 million are now being directed to the company’s oil projects.

In 2010, the company plans to operate four rigs and drill 20-25 wells in the Granite Wash. Currently all the rigs are in Wheeler County. 

“The Woodford and Granite Wash both are expected to grow 20% or more this year because of the momentum we had coming into 2010 and continued great results,” said Lee K. Boothby, president and CEO, in an April statement.

The company is electing to “slow the pace” of its development drilling, mostly in its Woodford shale acreage, but says it will continue its efforts in the gas plays.

"It's important that we keep working hard to improve our drilling and completion performance in these gas plays,” he said.

1H10
Average initial production rates for the first 12 wells in the Granite Wash were 20 MMcfe/d. Gross production in the first quarter of 2010 set an area record of nearly 180 MMcfe/d gross (nearly 110 MMcfe/d net).

Five of the most recent seven wells were drilled in the Atoka formation, a known dry gas producer.

The Carr and Lunsford wells were drilled in the Briscoe area, located approximately eight miles west of Stiles Ranch. Prior to these recent wells, all of the company's drilling to date had been conducted in the Stiles Ranch field (19 horizontal wells were drilled in 2009 with an average initial production of 18MMcfe/d in a 24-hr period).

Lateral lengths in the company’s most recent wells were 4,300’ - 4,700’ with drill and complete costs to date of approximately $7.3 million. The company reports drill and case costs per lateral foot are down nearly 20% when comparing the first seven wells drilled to the most recent wells.

2H10
The company plans to continue running four operated rigs in the Granite Wash. The majority of the drilling program in the second half of the year is expected to focus on drilling development wells in the Marmaton formation.

Newfield expects to drill 20-25 wells in the play in 2010. The company owns interests in approximately 40,000 net acres in the play.

Newfield's interest in the play averages approximately 75%.

Since 2002, the company has drilled roughly 150 vertical wells in its Granite Wash leasehold (primarily Stiles/Britt Ranch fields, Wheeler County, Texas).

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