Slipped deep in Devon Energy’s second quarter earnings report was word that the company intends to expand operations in Oklahoma’s prolific STACK, that northwest region where wells exceeding 2,000 barrels a day have been hit in the past year. Operations in west Texas will also be targeted for expansion.
Devon said its full-year 2016 upstream capital program will range between $1.1 billion and $1.3 billion which is an increase of $200 million from previous guidance.
“The incremental capital will be deployed in the STACK and Delaware Basin, with the potential to add as many as 7 operated rigs between these prolific plays in the second half of 2016,” stated the company in its report. “The additional capital investment is expected to deliver incremental production in early 2017.”
There is obvious supportive reason for Devon to expand the drilling operations. The company said its production from U.S. resource plays had average production of 419,000 Boe per day.
“This performance was highlighted by strong results from the STACK and Delaware Basin where aggregate production increased 27 percent year over year. Light-oil production from U.S. resource plays, which is Devon’s highest margin product, averaged 110,000 barrels per day. This result exceeded the top end of guidance by 2,000 barrels per day.”
