How Crescent Point was successful in 2015
Tight oil giant: Crescent Point was Canada’s busiest operator in 2015
By Darrell Stonehouse
June 27, 2016, 7:42 a.m.
The great oil price decline of 2015 had most western Canadian tight oil producers cutting development drilling to the bone.
Not Crescent Point Energy, the most active driller in the Oilweek/CanOils 2015 Top 100.
Crescent Point drilled 700 net wells in 2015, up 22 from the previous year, despite cutting its capital expenditures program to $1.56 billion, which was down approximately 25 per cent from 2014 expenditures of $2.1 billion. The company spent $1.35 billion on drilling and development activities and spent $208.9 million on land, facilities and seismic.
It was rewarded for its efforts with significant production increases and increased reserves.
Crescent Point realized record daily average production of 163,631 boe/d in 2015, weighted 90 per cent to light and medium crude oil and liquids. This is a 22,828-boe/d increase compared to 2014.
The company replaced 109 per cent of production on a proved-plus-probable (2P) reserve basis by the drill bit. Including acquisitions, it replaced 315 per cent of production and increased 2P reserves by 16 per cent, or 128.3 million boe, to a total of 935.7 million boe. And it added the reserves at a finding and development cost of $9.83/boe, including changes in future development capital on a 2P basis.
“2015 was a challenging year for our industry,” says company chief executive officer and president Scott Saxberg. “But as a company, we executed on our capital program and generated organic production per share and reserves per share growth. At the same time, we significantly lowered our drilling and development and F&D costs.”
How did Crescent Point do it?
Lower service costs due to overcapacity in the industry, combined with improved drilling efficiencies, is one answer. Saxberg says by year-end 2015, the company had realized average drilling and development capital cost savings of approximately 30 per cent across its core resource plays. This allowed it to drill more wells with less money, replacing production and adding to its reserves.
Saxberg reports that Crescent Point continues to see strong results from the implementation of its cemented liner completions with closeable sliding sleeve technology. During the fourth quarter of 2015, closeable sliding sleeve liners were successfully deployed during the drilling and completion of all wells in the Viewfield Bakken, Shaunavon and unconventional Midale plays. In addition to reducing well cleanout costs, closeable sliding sleeves are expected to increase the long-term efficiency and productivity of the company’s waterflood programs through increased control of water flow. Crescent Point also implemented the use of sliding sleeve technology in the Saskatchewan Viking Play and recently began using cemented liner completion technology in the Swan Hills Beaverhill Lake resource play.
Crescent Point also continues to test new completion fluids in order to cost-effectively enhance productivity and unlock new potential drilling locations. During 2015, the company’s new completions fluids in the Viewfield Bakken play improved initial 90-day oil production rates by approximately 50 per cent in comparison to average offset wells in certain areas of the play. Crescent Point is also testing new completion fluids in the Shaunavon, Torquay, unconventional Midale and Saskatchewan Viking resource plays.
Additionally, Crescent Point has begun using new completion methods in its conventional wells to further enhance capital efficiencies.
Waterfloods in all its plays are also slowing decline rates and adding to the company’s reserve base.
Crescent Point continued to advance its waterflood programs during 2015 and achieved its target by converting approximately 70 producing oil wells to water injection wells across its asset base. Increased water injection optimizes reservoir pressure leading to reduced decline rates and improved recovery factors.
Crescent Point added approximately 4.5 million boe of 2P reserves attributed to waterflood at the Shaunavon and Viewfield tight rock plays in 2015. This represents the third consecutive year of waterflood reserves recognized by independent evaluators at Viewfield.