Enverus South Texas Scout, November 7, 2019
Chesapeake Energy continues to make improvements in its Brazos Valley operations. Well costs are down 21% since the beginning of the year to $830 per ft, with lateral lengths averaging more than 9,000 ft. Through its well optimization and workover program, base field declines were improved, which helped to push October oil production to a record 40,000 bo/d. The previous high oil rate for Brazos Valley assets was set by prior operator WildHorse Resource Development in November 2018 when it was running five rigs, compared with Chesapeake’s current four. Total Q3 Brazos Valley volumes averaged 53,000 boe/d.
On a per-well level, Chesapeake now expects its 2019 peak oil rates at Brazos Valley to average 890 bo/d, up 30% from Wildhorse’s 2018 average of 682 bo/d. Chesapeake placed 25 wells online in the play during Q3, of which 14 reached sales in the last five weeks of the quarter.
The company continues to expand the black oil window, where it has brought online 13 wells since Feb. 1 with peak 24- hour rates exceeding 1,000 bo/d. It plans to turn 20 more black oil wells to sales in Q4.
On its legacy South Texas assets, Chesapeake brought 47 wells online in Q3, with 46 reaching sales in August and September. Due to the timing and longer cleanup periods, its South Texas production fell to a 2019 low of 94,000 boe/d, down 6% YOY. The company is running four rigs on the assets, where it plans to place 41 more wells online in Q4.
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