Summary
Diamondback Energy, Inc. (FANG) filed an 8-K on April 11, 2013, to report on its accelerating horizontal drilling program, primarily targeting the Wolfcamp B interval in Midland and Upton Counties. The company highlighted initial success from its first two horizontal wells, the Janey 16H (Upton County) and Kemmer 4209H (Midland County), both exhibiting strong initial production rates with a high percentage of oil. Encouraged by these results and ongoing analysis, Diamondback is increasing its horizontal drilling activity. The company planned to add two more horizontal drilling rigs in 2013, bringing its total to four, to accelerate its development program. This expansion is expected to lead to full-year 2013 production at or above the high end of previous guidance, with increases weighted towards the second half of the year, and suggests an anticipated increase in the 2013 capital budget.
Key Highlights
- 1Diamondback Energy is actively expanding its horizontal drilling program in the Wolfcamp B interval in Midland and Upton Counties, Texas.
- 2The company reported positive initial production results from its first two horizontal wells, Janey 16H and Kemmer 4209H, with strong oil content (85-86%).
- 3Initial production rates for these wells ranged from 618 to 892 BOE/d (24-hour IP) and 486 to 712 BOE/d (30-day average IP).
- 4Anticipated Estimated Ultimate Recovery (EUR) for these wells is projected to be between 400 to 500 MBOE.
- 5Diamondback plans to increase its horizontal drilling rig count from two to four during 2013 to accelerate development.
- 6The increased drilling activity is expected to result in 2013 production reaching or exceeding the high end of previously issued guidance, with weighted production in the second half of the year.
- 7The company anticipates an increase to its 2013 capital budget to fund this expanded horizontal drilling program.