QEP Resources started off 2018 by announcing their plans to shift to a pure-play Permian Basin focused company. This was coupled with plans to divest assets in the Williston Basin, Haynesville/Cotton Valley Shale and the Uinta Basin throughout 2018 and 2019. As a result, QEP is now diverting capital from those to-be-sold basins and into the Permian to enable the start of full-field development (much like other companies in the region.) The have coined their strategy in the Permian the "Tank-Style" development program.

This strategy essentially allows QEP to access multiple stacked reservoir layers via a single surface location, allowing for advanced completion designs. The multi-layer approach is not new, but QEP went a step farther in describing their use of a "Pressure Wall" to separate producing wells from completing wells and a "Buffer" to cut down on the interference between completed and the drilling wells. The graphic below is from QEP's investor deck and explains these two concepts.

This has several benefits, broken down as follows:

Above Ground

Maximizes surface equipment utilization & efficiency

Allows for use of multiple drilling rigs to cut down on cycle time and allow for services to be shared

Cost savings from recycled water, reduced well site facility costs and pipeline costs

Below Ground

Maximizes production & EUR

Maintains reservoir pressure during completion operations

Minimizes well interference and shut-in times for offset wells already on production





With the implementation of this approach, QEP boosted first quarter 2018 production out of the Permian to 30.9 Mboe/d, which was an 11% sequential growth. QEP was also able to turn-in-line of 31 net wells during the quarter, coming in above the guidance of 18 net wells. QEP now expects to bring online 9 more wells in the Permian Basin than they originally planned for the year.



