Citation seeks to grow the value of its producing property base through the origination and implementation of a targeted range of primary, secondary and tertiary recovery projects. While many of our fields have been producing for 50 years or more, our properties are typically located in prolific oil and gas producing basins that offer excellent opportunities for continued growth in proved reserves and production volumes through additional exploitation and development investment.
Similar to our acquisition strategy, we apply rigorous, engineering-driven risk-return analysis coupled with geology-driven exploitation studies to support our development program. As a result, Citation’s finding and development costs have consistently been well below industry averages. The company uses a portfolio-based approach to its development program that is designed to balance risk with growth opportunity.
Our capital projects are generally segmented into five categories:
Workovers, reactivations and stimulations
With over 15,600 active wells, Citation is continually presented with low-risk opportunities to enhance production of its producing fields by re-working existing wellbores. These projects encompass the full-range of project types, including acid treatments, fracture stimulations, adding wellbore perforations and reactivating temporarily abandoned wells. Long a hallmark of our capabilities to enhance the value of our properties, workover, reactivation and well stimulation projects continue to form the foundation of Citation’s ongoing capital program.
Infill drilling and waterflood expansion
Advances in drilling and completion technologies, along with improved commodity prices, have contributed to an increase in Citation’s infill drilling activity and waterflood expansion opportunities. Infill drilling projects include both vertical and horizontal wells located in and around Citation’s existing areas of production. These projects aim to increase production volumes and recoverable reserves through down spacing or pattern optimization and are the most common type of project in our typical development program.
Primary reserves development
With a very deep, diverse set of properties across our four geographic regions, Citation actively seeks to identify opportunities to extend known field limits or expand productive horizons through drilling for primary reserves that remain unidentified by prior operators. In contrast to our more traditional infill drilling investments, these projects are characterized by greater geologic risk and reservoir complexity, but offer higher production and reserve potential.
Unconventional resource plays
As a result of its acquisitions of producing properties, Citation currently controls acreage in several unconventional resource plays. In addition to its previous development of coal-bed methane assets in the Rocky Mountain region, Citation is an active participant in the Bakken Shale play in the Williston Basin in North Dakota and the Mississippian and Woodford Shale play in southern Oklahoma. Consistent with our development strategy, we do not seek to be the technology innovator in these unconventional plays, but rather chose to exploit these unconventional resources as they become economically attractive targets.
Enhanced oil recovery
With our historical acquisition strategy focused on mature oil properties with large volumes of original and remaining oil in place, Citation has amassed a property base with significant potential to access additional remaining recoverable reserves through the application of a variety of tertiary recovery techniques. Analysis of the Citation asset base has identified over 40 fields with tertiary recovery opportunities through CO2 and inert gas injection, chemical flooding and thermal applications. Our EOR team is currently focused on both the design and implementation of polymer injection as a vertical waterflood redistribution tool to improve performance in high water cut multi-pay zone reservoirs, steamflooding in the Rocky Mountain and Mid-Continent areas, inert gas injection in Colorado, microbial injection in various regions, and a surfactant polymer flood in our Central region.