ActivePaper Archive Laredo’s new computer model leads to increased production - Oklahoman, 6/14/2016

Laredo’s new computer model leads to increased production

TULSA — Laredo Petroleum Inc. has boosted its second-quarter production estimates while continuing to lower costs, the Tulsa-based oil and natural gas producer said Monday.

Speaking at analyst day in Midland, Texas, Laredo executives touted a new computer model they say has helped the company plan its drilling projects and predict the wells’ success. The Earth Model combines three-dimensional seismic data, information from well cores and more than 50 microseismic data points throughout the Permian Basin in west Texas, said James Courtier, Laredo’s vice president of exploration and geosciences technology.

Improved forecasts

“This is an amazing data set ” Courtier said during a conference call with analysts. “It allows us more accurate forecasts of production up to six months out ”

The model also helps Laredo employees decide where and how to drill, said Karen Chandler, Laredo’s director of operations, technology and planning in the Permian Basin.

“The Earth Model has resulted in optimized well locations and optimized landing points” she said.

In part because of the computer modeling, Laredo executives on Monday boosted the company’s second-quarter production forecast by 6 percent to a range of 4.1 million to 4.3 million barrels of oil equivalent, up from the earlier guidance of 3.8 million to 4.1 million equivalent barrels.

The executives also lowered the company’s unit lease operating expense guidance for the second quarter to a range of $4.50 to $5.25 per equivalent barrel, down 7 percent from $4.75 to $5.75 per equivalent barrel.

“Laredo continues to derive substantial benefits from the strategic data and infrastructure investments the company views as fundamental to efficient resource development ” CEO Randy A. Foutch said.

“The Earth Model is instrumental in designing completions that are producing well results more than 30 percent above their type curves. ... The sustainable benefits Laredo is recognizing from the Earth Model and production corridors are expected to continue to positively impact the company’s capital efficiency”