Market context: Longer laterals drive Duvernay performance
With its merger with Veren Inc., Whitecap Resources Inc. is now the dominant player in the greater Kaybob Duvernay with 535,000 gross acres of land, and 93,000 boe/d of production.
The deal also came with a wealth of technical knowledge for Whitecap, as Veren has been the busiest driller in the greater Kaybob area the last two years, spudding 66 wells in the Duvernay (see map above, courtesy of gDC Cloud).
Veren entered the Duvernay in 2021 after acquiring Shell Canada’s assets. It added to those assets through a deal with Paramount Resources, building a position of 465,000 gross acres.
Whitecap, itself, has spud 29 wells in the Kaybob Duvernay since it entered the play in 2022, after its acquisition of XTO Energy Canada’s assets. It has 74,000 gross acres under lease.
Both companies targeted the condensate-rich window of the play, but in 2024 Veren shifted focus to the volatile oil window. The company brought 37 wells onstream, across eight multi-well pads, in the volatile oil window during the year.
In 2025, it plans to drill wells in the liquids-rich and lean gas window of the Duvernay.
Veren has been pushing lateral lengths since entering the play at Kaybob. It has extended the average lateral length by almost 15 per cent from 2,900 metres to 3,300 metres.
In the first quarter of 2024, it drilled the longest onshore well in Canadian history at Kaybob. The record well had a total measured depth of 9,017 metres, including approximately 5,400 metres of lateral length, which was done in one bit run.
In 2024, Whitecap spud 23 wells and brought on production eight wells at Kaybob, including three wells with 4,200-metre lateral lengths, its longest Duvernay laterals to date. Its next three development pads will feature 2.5-mile (4,000-metre) laterals, enhancing resource recovery and operational efficiency, Joey Wong, vice-president, West Division, said on the company’s year-end 2024 earnings call.
The box and whisker plot below shows the differences in lateral lengths completed by both companies. The box represents the interquartile range, with the lower and upper edges of the box marking the first and third quartiles, respectively. The median is indicated by the line within the box, with the mean lateral length represented by the dot. The “whiskers” show the maximum and minimum lateral lengths.
Data Analytics in geoSCOUT shows that both operators exclusively used plug and perf completions systems in the Duvernay. Both have also been increasing completions intensity in the play.
Veren is pumping slightly more frac stages than Whitecap for a given well length. Looking at the number of intervals/clusters, the gap widens due to Veren perforating a higher number of intervals per frac stage (as well as a higher stage count). Veren typically perforates nine clusters per stage vs 7-8 clusters per stage for Whitecap wells.
Veren and Whitecap both follow a consistent proppant intensity — and the proppant placed for a given length tracks a similar line for both companies, especially for the longer wells. Whitecap wells have been pumped at a slightly higher fluid intensity than Veren.
Veren assets deliver on liquids production
Veren’s focus on the liquids-rich and volatile oil window in the Duvernay has paid off, with strong first six-month cumulative production the last two years. Wells drilled at Kaybob have averaged over 135,500 bbls in their first six months on production, with Fox Creek wells averaging 111,500 bbls. Its top well delivered almost 211,000 bbls in the first six months (102/04-15-065-20W5/00).
However, on a boe basis, Whitecap wells have been more productive in their first six months. Its Kaybob South wells have delivered an average of slightly under 157,000 boe of cumulative production their first six months, including 76,000 bbls/d of total liquids.
Whitecap testing bench style development
Like in the Montney, Whitecap has been testing bench style development in the Duvernay.
Whitecap completed its 11-14B pad, a pilot drilled with vertical benching in a wine-rack style development, in 2024. The pad had IP90 rates of 1,237 boe/d (40 per cent liquids) including 379 bbls/d of condensate per well.
The pilot wells had 2,900-metre lateral lengths, compared to Whitecap’s type curve of 3,200 metres.
“We’re now up to over 120 days of production for that 11-14B pad and with an IP120 still over 1,200 boe/d,” Wong said. “Combined with our observations of the bottomhole flowing conditions, we are pleased with the initial results that continue to provide key validation points that support our assessment of what this asset might be capable of.”
Whitecap recently completed fracturing operations on its second wine rack pad at 8-5A, which is a follow up to the company’s pilot at the 11-14B pad.
“As results are further collected from these early pads, we will assess the potential for further enhancement through potential inter-well spacing reduction and associated inventory adds, proceeding only if additional well density proves economically accretive,” said Wong.
The company’s ability to apply this potential development style across its Duvernay assets at Kaybob is enabled by the relative thickness of net pay the company has observed at upwards of 50–70 metres.
“We have not yet incorporated improvements to our inventory stemming from vertical benching into our Duvernay inventory at this time but are encouraged by the initial results,” said the company.
Veren has taken a different approach to its development program. It is developing the Duvernay as a single bench but has adjusted its well targeting within the formation compared to the previous operators.
The company is now landing wells 26 metres below the Duvernay top, while the previous operator was landing wells 13 metres below the top. Lowering the landing zone allows it to optimize the fracks and ultimately stimulate more of the rock per well due to upward propagation of the frac.
With the Veren merger, Whitecap now has approximately 735 drilling locations in the Kaybob Duvernay. It will be interesting to see how its well design and drilling and completions program progresses in the future.
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