American Oil and Gas Reporter - June 2024 - 60

SpecialReport: Permian Basin Playmakers
deal flow, and we have a great reputation
in the market for being good partners
that people want to be across the aisle
from on the transaction side, " he says.
The company also enjoys an information
advantage from more rigs running
on its position that translates to more
proprietary data from which to gain a
better understanding of offsetting properties,
Walter adds. Although the size of
available additions tends to be smaller
than those of the previous two years,
there will continue to be opportunities,
including for off-market assets like the
recent bolt-ons, he says.
Vertical Well Development
Assessing potential bolt-ons and existing
prospects is helping Texland PeHighPeak
Energy Inc.'s commitment to investing in infrastructure as it has developed its
oil-rich, 135,000-net acre position in the eastern Midland Basin includes building out
water handling infrastructure and horizontal saltwater disposal wells, and a 10-megawatt
solar farm to power drilling rigs and in-field operations.
a couple hundred locations in the Wolfcamp
C alone there, " he remarks. " We
are going to start delineating and looking
at that over time. "
The Middle Sprayberry looks attractive
in Signal Peak as well, he adds, but most
development in the bench is occurring
offset to Flat Top in the north.
" We knew the zone was there because
we get oil coming to surface as we drill
through it to get to the deeper zones, "
Hollis says. " It is all about commerciality.
Being a smaller company, we like to do a
lot of our exploring by watching results
from other companies. When we see folks
getting good results in some of these
other zones offsetting ours, we usually
fall in quickly behind them. "
Growing Production
As players across the basin continually
assess benches and growth options, Permian
Resources continues to expand
through the drill bit, acquisitions and
bolt-ons. Running a dozen rigs and three
or four frac spreads on a 250-well program
this year, the Midland-headquartered company
has grown production to 320,000
boe/d, of which 152,000 barrels is crude
oil, Co-Chief Executive Officer Will Hickey
points out.
Production is expected to grow an additional
3,500 boe/d after integrating
grassroots and working interest additions
and two largely undeveloped bolt-ons of
11,200 net acres offsetting the company's
Parkway development in Eddy County.
Formed in September 2022 with the
60 THE AMERICAN OIL & GAS REPORTER
merger of Centennial Resource Development
and Colgate Energy Partners,
Permian Resources holds more than
400,000 net acres counting its acquisition
of Earthstone Energy last year.
" Our overall objective is to target acquisitions
that enhance the quality of our
business and drive value for shareholders, "
says Co-Chief Executive James Walter.
" For us, that means seeking out acquisitions
that increase the quality and duration
of our current inventory at prices that
make sense. Our recent acquisitions
achieve all of these goals. "
Accelerated drilling and completion
efficiencies in Earthstone's former operations
included an 18% reduction in
drilling days per well and a 50% reduction
in completion days per well, Hickey says.
" When we rolled out the Earthstone
acquisition, we were highly confident
that we could reduce days and completion
times and improve production operations,
driving material synergies to be fully realized
by year-end 2024, " he comments.
" We have already achieved that and more. "
The company also has seen some unanticipated
efficiency gains in the Midland
Basin, a testament to the operations team's
ability to unlock value by improving run
times from better compression performance,
optimizing artificial lift and improving
chemical programs, Hickey adds.
With acquisitions tending to flow to
low-cost operators over time, Walter says
the company's corporate presence in Midland
helps. " We are based in Midland, in
the heart of the Permian, the heart of the
troleum LP direct growth for conventional
waterflood projects on the Central
Basin Platform, says company President
Jim Wilkes.
" We are looking for things that we
can bolt on and waterflood to enhance
production in an area that may be underdeveloped, "
says Wilkes, immediate past
chairman of the Independent Petroleum
Association of America. " These days,
we typically put together a package of
about 10 wells, drill, evaluate what we
did, and then come back later on and put
another package together. "
About 20 wells are planned this year
on a position with more than 700 producing
vertical wells and additional injectors that
produce 6,000 bbl/d of oil.
Leasing can be challenging because
minerals often are held by the majors or
have been passed down to multiple heirs.
However, the Fort Worth-based company
is deploying 3-D seismic data to analyze
potential new development opportunities
that can include step outs and infill development,
all while avoiding assets with
a lot of plugging liability, Wilkes relates.
About 90% of production is from the
San Andres and upper and lower Clear
Fork intervals. Well designs include a deep
surface pipe string to protect the well from
the corrosive Santa Rosa zone. Surface
casing is cemented back to surface.
Texland then runs 5.5-inch casing to
total depth and also cements it back to
surface. Since the target zones are
dolomite, completions consist of an acid
job with ball sealers. The team then swabs
and tests the well to determine whether a
frac is needed.
With fracs extending vertically as well
as horizontally from the wellbore, a typical
American Oil and Gas Reporter - June 2024

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