In its June presentation, Whiting Petroleum (WLL) highlighted its cost efficiencies in the Bakken region. The chart below notes that the company has decreased its days taken to drill wells (spud-to-total depth, or TD) in the Williston Basin by 57.0% to ten days since 2011. In comparison, in Continental Resources’ (CLR) Bakken region, a two-mile lateral well was drilled from spud-to-TD in 8.2 days in the first quarter.
According to WLL, the use of state-of-the-art drilling rigs, high-torque mud motors, and 3D bit-cutter technology have contributed to the significant improvement in its drill times.
Well completion costs
Whiting’s well completion costs are expected to fall 25.0% from $9.1 billion in 2014 to $6.8 billion at the midpoint in 2018. Other peers that are focusing on decreasing well costs include EOG Resources (EOG), which expects to lower its well costs by 5.0% in 2018. Apache Corp. (APA) reduced its average Alpine High well costs by 20.0% in the first quarter compared to its 2017 average.
In its earnings conference call for the fourth quarter of 2017, WLL’s management noted that it expects to implement new technology on its well completions in 2018. These include technologies to increase its pumping efficiency and fracture intensity. WLL’s CEO, Bradley Holly, commented, “We’ve got a lot of good initiatives on the completion side this year, as well as we’ve been able to hold our costs flat as well on completion.”
In the first quarter, Holly noted that the company is “focusing on and are continuing to focus on would be getting more of our water on the pipeline and continuing to try and renegotiate and bring our price for saltwater disposal down.” Holly added that this is one of the company’s highest cost categories, but it’s made “good headway.”
In the next part, we’ll look at the trends in Whiting Petroleum’s cash costs.