SandRidge Energy CEO James Bennett told stock analysts on Friday that the company has expanded its drilling focus area to include Sumner County, and now has more than 100,000 acres leased there.
Last year, Oklahoma City-based SandRidge, the state’s largest oil company, announced it would dramatically narrow its drilling area to improve efficiency. It said at the time that it would focus on Harper, Barber and Comanche counties – southwest of Wichita – in Kansas and Woods, Alfalfa and Grant counties in Oklahoma.
Even so, the company continued to drill experimentally here and there among its more than 2 million acres of leases spread across southern and western Kansas.
“It’s the great work of our geology and engineering teams who set up a test program that has now turned into a full development program,” Bennett told analysts on the conference call.
Chief operating officer David Lawler told the analysts that the company drilled five appraisal wells in Sumner County and got strong production: an average per well over the first 30 days of 601 barrels of oil equivalent a day – a measure that includes oil or its equivalent in energy of natural gas or natural gas liquids.
Lawler said the Sumner County wells are about 70 percent oil and 30 percent gas or gas liquids, Lawler said. The ratio is important because the price of oil is much higher than the price of natural gas.
Lawler said the company is planning to drill 45 wells in Sumner County in 2014. The company said it plans to drill about 460 wells in the seven counties in 2014, with most of them in Oklahoma.
Bennett also stressed on the call how much the company continues to improve efficiency by increasing production while lowering cost per well.
SandRidge accumulated the leases in Kansas and Oklahoma aggressively several years ago, but the geology of the Mississippian layer proved more complex and less consistently profitable to drill than expected. The mixed results, plus the high cost of building the disposal wells, pipelines and electrical lines, led investors to depose company founder Tom Ward almost a year ago in favor of Bennett.