WPX Energy (NYSE: WPX) has completed the purchase of another 14,300 net acres in the San Juan Basin’s Gallup oil window from an undisclosed seller for $26 million.
The acreage purchase represents an estimated 100 gross drilling locations, boosting WPX’s tally in the San Juan Gallup to approximately 500. WPX now owns or controls approximately 100,000 acres in the core of the Gallup oil play where it has spud more than 100 wells following a discovery in early 2013.
WPX’s overall drilling and completion costs are down 24% on its Gallup wells this year compared to its average in 2014. The company reported first quarter Gallup oil volumes of 8,100 barrels per day. WPX also is increasing its returns in the oil development through the construction and operation of its own oil, gas, and water gathering systems, and has taken steps to lower the basis differential on its Gallup oil sales from roughly $13 per barrel to $8 to $10 per barrel.