Devon Energy announces record stack well reaching 6,000 BOE

[wilmawatts]

how come the stock and those in the stack nearby have not moved on this news? this is a massive well

Devon Energy announces record stack well reaching 6,000 BOE per day
BY Reuters
— 7:00 AM ET 07/11/2017
July 11 (Reuters) - Devon Energy Corp ( DVN
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* Devon Energy ( DVN ) announces record stack well reaching 6,000 BOE per day, provides development update
* ‍Brought online meramec well, commenced production on several high-rate wells in core of over-pressured oil window of stack play in Q2​
* Also brought online 4 additional high-rate meramec wells in core of over-pressured oil window during Q2
* ‍Will spud showboat development project, which includes approximately 25 wells across 4 landing zones, in Q3​
* ‍The additional four wells attained an average 30-day initial production rate of 2,000 BOE per day​ Source text for Eikon: Further company coverage:

[dan_s]

They've had a good week. Here are the increases since July 7
CLR is up 9.4% < A lot of CLR's STACK leasehold is in the same area where Devon completed the big well
DVN is up 7.2%
NFX is up 4.1%
XEC is up 2.9%

There is lots of fear in the market right now and investors are very worried about oil prices. The big "myth" is that U.S. companies cannot make money unless oil is over $50/bbl. SCOOP/STACK and the Tier One areas of the Permian, Eagle Ford, Marcellus/Utica and Haynesville have very good well-level economics at today's oil, gas and NGL prices.

All of the Sweet 16 should report good Q2 results. My hope is that some of the FEAR can be resolved by good quarterly results.

OilPrice.com will feature Gulfport Energy (GPOR) in an article that I wrote next week. In SCOOP, the Sycamore zone is the same thing as the Meramec up in STACK. Gulfport will soon spud a Sycamore well to test the zone. Gulfport is getting fantastic results in the Woodford, so that is where their focus should be this year, but they have over a decade of low-risk high-return drilling locations to work just south of STACK.

For those of you not familiar with SCOOP/STACK, you need to do some homework. The most resent company presentations of the companies mentioned above is a good place to start. Also, take a look at Jones Energy (JONE). Jones calls their position the MERGE area.

[wilmawatts]

thanks. yeah I expected more of a reaction to a 6,000 boed well. that is off the charts, like hitting it out of the stadium with bases loaded

[dan_s]

More important than the initial production rate is Devon's estimate that it is a 2 MMBOE EUR. Assume these horizontal wells will produce half of the EUR in first three years on-line and it will give you an idea of how fantastic the well level economic are in the over-pressured part of STACK. Lease Operating Expenses and production taxes are only $8 to $10 per BOE for these high rate flowing wells. Netbacks are very high; much better than anything we had at Hess during my 18 years there.

CLR, DVN, GPOR, NFX and XEC all have outstanding technical teams. They are working with the top petroleum engineers at SLB ad HAL. They are still improving the completion designs, so the EURs should keep going up.

EUR = Estimated Ultimate Recovery based on decline curves.

[wilmawatts]

sweet