Chesapeake Energy Corp. has discovered a potentially lucrative new oil play, the company announced Friday.
Chesapeake has completed two horizontal wells in the Hogshooter formation, about 10,000 feet underground with laterals approaching 5,000 feet. Two more wells are under way in the formation, which is part of the Anadarko Basin in western Oklahoma and the Texas Panhandle.
One of the completed wells yielded more than 7,300 barrels of oil equivalent in its first eight days of stabilized production, spurring optimism from CEO Aubrey McClendon.
“We expect this new Hogshooter discovery to provide a significant boost to Chesapeake’s focus on harvesting its existing assets for growth and value creation rather than on pursuing new leasehold. In addition, this new Hogshooter development area should further enhance our growing liquids production, which we expect will have transformational effects on our company’s operational and financial performance in the years ahead.”
McClendon said the Thurman Horn well is one of the best onshore oil wells drilled in the lower 48 states in the past several decades, according to Chesapeake’s research.
“This discovery exemplifies the scale and quality of our world-class asset base and the skill and creativity of our technical teams. Their hard work and determination is continuing to create significant additional value for our shareholders and other stakeholders.”
Chesapeake owns approximately 30,000 net acres in the play, which are more than 90 percent held by production from its legacy deeper Granite Wash operations.
The company expects to drill at least 65 wells in the Hogshooter play over the next several years. Those wells will be part of Chesapeake’s already budgeted Anadarko Basin drilling program, so they will not require any increase to its capital expenditure budget.
Chesapeake had none of the 65 potential future Hogshooter wells classified as proved reserves in the company’s March 31 reserve report.