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World Oil: Jim Redden, Contributing Editor

Soaring drilling, production block out irritants

With 435 active rigs, like this one drilling for Anadarko in the Delaware sub-basin, well spacing has become a tricky issue across the Permian basin. Image: Anadarko Petroleum Corp.

The storied wide open spaces of West Texas aren’t so much these days. 

Despite an aerial reach of more than 75,000 mi2, overlaying up to 12 prospective zones, the growing population of rigs and frac spreads in the invincible Permian basin of Texas and southeastern New Mexico has made well spacing a dicey issue. Get too close and ultimate reservoir drainage could take a literal hit, or in the vernacular of RSP Permian Inc., fall victim to “frac bashing.” 

“What the data is showing us is that we’ve been able to drill wells down to about 400 ft apart, without seeing really any negative results from offset wells. But, when you get below 400 ft, you start to see that,” CEO Steven Gray says of his pure-play company’s experience while developing a 92,000-net-acre leasehold across the Midland and Delaware sub-basins.

With 435 active rigs, like this one drilling for Anadarko in the Delaware sub-basin, well spacing has become a tricky issue across the Permian basin. Image: Anadarko Petroleum Corp.

The more commonly known “frac hits” phenomenon joins rising service, labor and acreage costs, and impending takeaway concerns, in what is arguably the world’s most celebrated unconventional oil play. Headwinds aside, “the Permian continues to look more attractive than most other options for new investment in the global upstream hopper,” Wood Mackenzie Chairman and Chief Analyst Simon Flowers wrote in a Feb. 13 note. Read more…