DUG Permian Basin takes place throughout the day. To follow speakers and to read what industry insiders are saying about the Permian, check back or follow @HartEnergConf on Twitter.

FORT WORTH, Texas—Growth in Midland Basin operations has been dramatic in the past year for Endeavor Energy Resources LP, a senior company executive told attendees May 22 at DUG Permian Basin.

The private company operates about 329,000 net acres in the core of the basin and is running 10 rigs, compared to two a year ago, said Lance Robertson, COO and senior vice president of development.

For Endeavor, Robertson said, well performance is driven by location in the basin, transition to small target windows of about 15 feet for landing zones, and higher-density completions with narrower stage spacing and more clusters per stage.

The first day of the conference wound up with a roundtable dedicated to markets featuring Chris Tennant, vice president, commercial at EnLink Midstream LLC (NYSE: ENLC); Joey Mahmoud, senior vice president of pipeline development at Tellurian Inc. (NYSE: TELL); and Greg Haas, director of integrated energy at Stratas Advisors.

Earlier in the afternoon, the advice from the chairman and CEO of Laredo Petroleum Inc. (NYSE: LPI) was that contiguous acreage positions deliver the best value. Oil and gas value is maximized through physical and financial contracts, he said, adding that Laredo is a big believer in advanced subsurface characterization.

Laredo primarily operates on over 140,000 gross acres, mostly in Glasscock and Reagan counties, and most of the acreage is contiguous. About 85% of the acreage is held by production.

At Houston-based Halcón Resources Corp. (NYSE: HK), long lateral development is the focus of the company’s Permian operations, said Steve Herod, executive vice president for corporate development. Halcón’s big concern is the Permian basis blowout.

Chisholm Energy Holdings LLC found a financial advantage in the Permian by committing to a dedicated frac fleet, said Mark Whitley, president and CEO of the Fort Worth-based company. Chisolm is running four rigs now and Whitley said the long-term fleet strategy has saved it about 20% in costs per stage.

The company operates Bone Spring and Wolfcamp in Lea and Eddy counties, N.M. Its completion designs call for proppant loading of 1,500 pounds per foot and stage spacing of 210 feet. Whitley said the wells use about 4,000 barrels of fluid per stage.

Anadarko Petroleum Corp. (NYSE: APC) is taking an aggressive approach to the Permian this year. The company will spend $1.1 billion in the Delaware Basin in 2018, said Chad McAllaster, vice president of operations in West Texas. Anadarko has 589,000 gross (240,000 net) acres and will average seven rigs and six completion crews, he said.

Sandwiched between morning and afternoon sessions was retired U.S. Navy SEAL Rob O’Neill, who urged on attendees with his “never quit” mantra.

“In SEAL training, they make it easy to quit; in fact, they encourage you to quit,” he said.

Morning sessions stressed strategic approaches. Todd Abbott, vice president of resource plays south for Marathon Oil Corp. (NYSE: MRO), ticked off the reasons his company likes the Permian Basin:

  • High-quality rock;
  • Ability to scale; and
  • High potential.

Marathon’s strategy, Abbott told attendees May 22 at DUG Permian Basin, is to devote 90% of its capital to four plays: Bakken, Permian, Scoop/Stack in Oklahoma, and the Eagle Ford.

Those plays account for 70% of the company’s production. In the Permian alone, Marathon will spend $380 million in Lea and Eddy counties, in 2018.

Ross Craft, chairman and CEO of Fort Worth-based Approach Resources Inc. (NASDAQ: AREX), described the challenges of profitable horizontal drilling: “We keep learning. It’s getting better,” he said. Enhanced completion techniques drove improved well performance in the company’s first year of cumulative production.

“Just when you thought it was safe to jump in the water again the differential sharks show up,” he lamented, noting that success in the Wolfcamp Shale created a temporary takeaway bottleneck.

Cory Richards, CEO of PT Petroleum, who joined Craft on the panel, called the recent Wolfcamp C discovery transformational, not only for company’s Trinity Project in Reagan, Upton and Crockett counties but for a large portion of the southern Midland Basin. The Trinity Project’s Orange 6091C well produced more than 100,000 barrels of oil in its first 140 days.

Devon Energy Corp. (NYSE: DVN) has a major effort ongoing in the Delaware Basin.

John Raines, vice president of Devon’s Delaware Basin business unit, told attendees in a late-morning operator spotlight that the company’s largest planned development in the area consisted of 24 wells in six different zones. He said the company continues to see efficiency gains including a 30% improvement in drilling times. A single crew is able to accomplish up to 15 frac stages in a day.

Earlier in the day, Clay Gaspar, president and COO of WPX Energy Inc. (NYSE: WPX), told attendees during his opening keynote that “even the smartest geologists and engineers can’t fix bad rock.”

That’s why WPX planted its flag in the Delaware Basin, he said. It has stacked pay, large inventory and great attributes that deliver quality wells.

WPX is running seven rigs in the Permian and could add a few more rigs by the end of the year. The company has adopted a “steady as she goes” strategy for the basin, Gaspar said, with a focus on mitigating risks through supply chain management of hydraulic horsepower, sand, rigs and water.

During the deal-making panel, Bill Marko, managing director of Jefferies, expressed concern about possible global supply shortfalls if the number of new final investment decisions (FIDs) don’t pick up. He said the backwardation of the curve makes no sense.

That said, Jefferies sees the Permian as the premier basin on Earth. “It’s a great time for people to buy as much as you can of all that oil in place,” he said.

His fellow panelist, Mark Sooby, managing director of Deutsche Bank, made the basin a benchmark of success, saying that if wants to be big in the industry, it has to be in the Permian. He noted that 80% of the top 20 E&P companies in the U.S. have either pure or significant Permian assets.