Devon Energy Corporation
announced results from its highly successful 2002 winter drilling program in Canada. Devon drilled a total of 276 wells throughout the Western Canadian Sedimentary Basin during the first quarter of 2002. Of those wells, 243 or 88 percent were successful.
The immediate success of the winter drilling program was reflected in higher oil and gas production rates. At March 31, 2002, Devon's Canadian crude oil production was approximately 53,000 barrels per day. Natural gas production was 825 million cubic feet (MMcf) per day. Natural gas liquids production was 16,000 barrels per day. On a barrel of oil equivalent basis, Devon's Canadian oil and gas production at the close of the first quarter was up approximately 2.5 percent over year-end 2001 rates.
"Devon's acquisition of Anderson Exploration last October significantly increased our portfolio of drilling opportunities," said John Richels, president of Devon Canada. "Because we completed the acquisition late in the year, however, we faced a challenge meeting our winter drilling objectives while simultaneously integrating the companies' operations. Our teams stepped up and delivered excellent results."
Notable Discoveries and Facilities Enhancements
- In the Northern Plains of Alberta, 91 wells were drilled for shallow gas in winter-only access areas with a 90 percent success rate. This brings total production from that area to 156 MMcf of gas and 4,100 barrels of liquids per day.
- In northeast British Columbia, a total of 60 wells were drilled in winter-only access areas. This drilling resulted in an 85 percent success rate, bringing total production from the area to 146 MMcf of gas and 5,800 barrels of liquids per day. The successful wells included three Slave Point pinnacle reef wells at Ladyfern.
- In Alberta's Deep Basin, the winter drilling program included 33 wells drilled with a 91 percent success rate. Devon acquired its extensive land holdings in the Deep Basin through the Anderson acquisition. With the drilling of these wells, Devon's net production from the Deep Basin increased to 107 MMcf of gas and 5,000 barrels of liquids per day. The company's Wapiti-Elmworth sour gas project is proceeding on schedule. This 100 percent Devon-owned facility is expected to commence operation on May 15, 2002 at 20 MMcf per day. Devon is considering additional opportunities to expand in the area, including assessing future drilling locations and a facilities expansion.
In the Foothills areas of northeastern British Columbia and west-central Alberta, Devon participated in the drilling of 19 wells with an 84 percent success rate. The majority of the natural gas discovered in the Alberta Foothills will be processed through the company's Narraway gas plant that Devon operates with a 42 percent working interest. The plant, which commenced operations in January, has a design capacity of 134 MMcf of gas per day. Devon's current net gas sales from the plant are 48 MMcf per day. Narraway is a focus area for Devon, and the Anderson acquisition added complementary acreage in this highly prospective exploration play. Additionally, in the Lynx area of the Alberta Foothills, two wells commenced production in early April at a combined rate of 14 MMcf per day net to Devon. Additional gas plant capacity at a third-party facility has been contracted to increase Devon's production in the Lynx area to 22.5 MMcf per day.
- In the Girouxville/Dreau area of the Peace River Arch region, Devon continued its highly successful oil exploration program with the drilling of three successful light Devonian oil wells. These wells flowed at individual rates of approximately 500 barrels per day. This increases the number of productive wells Devon has in the area to 16, with an average working interest of 75 percent. To accommodate these increased volumes, a 5,000-barrel per day production battery at Dreau is scheduled to commence operations in June 2002.
- Devon recently announced a significant natural gas find in the Mackenzie Delta in Canada's far north. The Devon operated Tuk M-18 well flowed gas at a restricted rate of 30 MMcf per day and has an estimated sustained deliverability of up to 80 MMcf per day. The well encountered an estimated 200 to 300 billion cubic feet of natural gas reserves. Devon has a 50 percent interest in Tuk M-18. The well was completed under budget in a total of 43 days, compared to the original forecast of 65 days. The Tuk M-18 well is the first significant onshore drilling success in the Mackenzie Delta by any operator since 1975.