American Oil and Gas Reporter - June 2014 - 125

SpecialReport: Hot Spots: Permian Basin

Energen Resources Corp. is running four development horizontal rigs and two exploratory horizontal rigs in the Midland Basin. The company's development program is
focused on pad drilling stacked Wolfcamp A and B laterals in southern Glasscock County, Tx., while its exploratory program is testing different benches in the Wolfcamp and
the underlying Cline Shale.

camp," Craft reveals. "It is a very efficient
system."
He calls water the company's biggest
challenge. "You have to be proactive and
think outside the box," Craft allows. "It is
expensive, but we had to put water infrastructure and recycling systems in place.
We were the first to put in a complete water and gas lift system. We have been on
the cutting edge by necessity. Two thousand identified locations and a 30-40
percent rate of return set the stage for us
for years to come."
Expanding Horizontal
Energen is ramping up its horizontal
drilling as well, according to Senior Vice
President David Godsey. The company has
approximately 300,000 net acres in the
Permian Basin and has identified almost
5,600 potential horizontal drilling locations
in the Wolfcamp and Cline shales in the
Midland and Delaware basins.
Energen began building its footprint in
the Permian Basin in the late 1990s.
Among its legacy assets is the Permian
Basin's first commercial well, the Abrams
No. 1, which was completed in 1921 in the
Westbrook Field and is still producing.
"It took more than a year to drill that
first well," Godsey comments. "Today, we
are drilling vertical wells in Westbrook in
fewer than four days."
He says the Westbrook Field, which is
a waterflood today, is winding down,
adding that Energen will drill only 10 wells

in the historical field this year.
Instead, Energen has turned its attention to its horizontal program. "We are running four development horizontal rigs
and two exploratory horizontal rigs in the
Midland Basin," Godsey reports. "Our development program is focused on pad
drilling of stacked Wolfcamp A and B laterals in southern Glasscock County.
"Our primary focus with the exploratory program is testing different benches in
the Wolfcamp and the Cline (which lies below the Wolfcamp)," Godsey says. "I
have often called the Permian Basin the
'Energizer Bunny' of basins. There are so
many multiple pays and zones that produce."
Godsey says Energen and other companies are still trying to determine the po-

tential of the Cline Shale. "The Cline has
been drilled for several years," he observes.
"The real challenge is understanding the
rock type and where the best zone is to
place the lateral. We are just getting started (in the Cline). It is a little more difficult. Many operators are drilling the Cline
with oil-based mud, while most Wolfcamp
wells are drilled with water-based mud."
Energen has a vertical Wolfberry program in the Midland Basin as well, in
which Godsey says the company will
drill 54 wells this year, which is half what
it did last year. However, he adds, the company will drill more than 75 horizontal
Wolfcamp wells in the Midland Basin this
year.
Delaware Basin
Energen also is focused on the Wolfcamp and Third Bone Spring formations
with a horizontal drilling program in the
Delaware Basin in far West Texas. Godsey says Energen has drilled more than 100
horizontal wells in the Third Bone Spring
in Ward, Loving and Winkler counties,
near the New Mexico border, but 2014 will
see that program completed.
In its wake, Energen is developing its
leasehold in Reeves, Winkler and Ward
counties, Tx., with a horizontal Wolfcamp
program. Godsey says Energen will spud
27 horizontal Bone Spring wells and 14
Wolfcamp wells in the three counties
this year, where it has five rigs running.
"The Permian Basin has multiple
benches with proven production," he exhorts. "We expect our Permian production
to grow 20 percent this year, and it could
exceed 30 percent in 2015. The primary

Energen Resources Corp. anticipates increasing its production from multiple Permian
Basin benches by 20 percent this year and it could exceed 30 percent growth in 2015. The
company reports it has 5,600 unrisked locations in the basin's Wolfcamp and Cline shales.

JUNE 2014 125

American Oil and Gas Reporter - June 2014

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