Midstates Drilling Efficiencies Lead to Lower Rig Count and Well Costs in MidCon
Midstates Petroleum (NYSE: MPO) has focused operations in the Mississippian Lime during the 2015 year. They have focused on reducing well costs through drilling efficiencies and working with suppliers. Production is expected to remain flat into 2016 as the number of completions shrink. The chart below shows the number of permits and completions by month in Oklahoma for MPO.
Mississippian Lime: Reduced rig count due to realized drilling efficiencies
- Wells generating IRR’s of greater then 35% at current well costs
- Reduced drilling cycle times by 20% from 22 days in 2014 to 17 in 2015
- Reduced rig count to three
- ~60% of cost saves have been through efficiency gains and process improvement
- Potential to add 350 new locations with 80-acre down spacing test in 2016
- Primarily focusing 2016 drilling program in Woods county
Anadarko Basin: No Plans for the Near-Term
- 2015 plan was geared toward a work over program to offset production declines and lease operating costs
- Monitoring other operator’s completion designs to prepare for when they return to the basin
- No drilling is planned for the future
Whats Next for MPO?
- Expecting to keep production flat into 2016 from 2015 levels
- No oil or gas hedges in place for 2016
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