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QEP Resources Reports Operating Results

Source: www.gulfoilandgas.com 2/25/2014, Location: North America

Operations Summary

Williston Basin:
QEP Energy's Williston Basin net production averaged approximately 27.7 Mboed (96% liquids) during the fourth quarter 2013, a 30% improvement over the third quarter 2013 and a 51% improvement over the fourth quarter 2012. Severe winter weather had a meaningful negative impact during the quarter. The Company continued to ramp up activity levels during the quarter, despite significant weather challenges, completing and turning to sales 26 operated wells during the quarter, including 17 wells in South Antelope with an average 24-hour initial production (IP) of approximately 3,025 Boed and nine wells in the Fort Berthold Reservation with an average 24-hour IP of approximately 1,850 Boed. The Company also participated in 22 outside-operated Bakken or Three Forks wells that were completed and turned to sales during the quarter (average working interest 7%). QEP Energy made significant progress on cost reduction over the past year with fourth quarter gross average drill, complete, and equipment capital costs of $10.0 million per well and lease operating expenses per Boe down 51% from 2012 levels. Additional capital and operational efficiencies are expected to be realized during 2014.

At the end of the fourth quarter, QEP Energy had eight operated rigs running in the Williston Basin (six in South Antelope and two in the Fort Berthold Reservation). QEP had eight operated wells waiting on completion (average working interest 94%). In addition, the Company also had interests in 31 outside-operated wells being drilled (average working interest 10%) and five outside-operated wells waiting on completion (average working interest 5%) at the end of the fourth quarter. Slides 6-8 depict QEP Energy's acreage and activity in the Bakken/Three Forks play.

Pinedale Anticline:
During the fourth quarter 2013, QEP Energy's Pinedale net production averaged 268 MMcfed (23% liquids). The Pinedale area experienced weather and operational production downtime during the month of December. QEP Energy began recovering ethane from Pinedale production on October 1, 2013 and ethane recovery has continued into the first quarter 2014.

QEP Energy completed and turned to sales 111 new Pinedale wells during 2013, including 29 wells for which QEP was operator but only owns a small overriding royalty interest. In 2014, Pinedale completions will return to those areas of the field where QEP has a majority working interest. QEP Energy suspends Pinedale completion operations during the coldest months of the winter, generally from December to mid-February. At the end of the fourth quarter, the Company had 54 Pinedale wells with QEP working interests drilled, cased and awaiting completion (average working interest 78%).

Drilling and completion efficiencies have allowed QEP Energy to maintain industry-leading average gross completed Pinedale well costs. During 2013, drill times from spud to total depth averaged 11.9 days, compared to an average of 12.8 days in 2012. At the end of the fourth quarter, QEP Energy had four rigs operating at Pinedale.

Uinta Basin:
During the fourth quarter 2013, Uinta Basin net production averaged 74 MMcfed (34% liquids) of which 38 MMcfed (28% liquids) was from the Lower Mesaverde play. QEP Energy began recovering ethane from Uinta Basin gas production on October 1, 2013 and ethane recovery has continued into the first quarter 2014.

At the end of the fourth quarter, the Company had one operated drilling rig working in the Lower Mesaverde play and had 80 producing wells in the play, two of which were completed and turned to sales during the fourth quarter (working interest 100%). QEP Energy has over 3,200 potential remaining locations in this liquids-rich gas resource play. At the end of the fourth quarter, the Company was drilling its second Lower Mesaverde well with a fundamentally different design that could considerably alter the economics and lead to an accelerated development approach.

In addition to Lower Mesaverde activity, during the fourth quarter 2013 the Company had one rig drilling vertical wells targeting multiple crude oil-bearing limestone and sandstone reservoirs in the Lower Green River Formation, at an average true vertical depth of 5,500 feet. During the fourth quarter, QEP Energy completed one Company-operated horizontal oil well and seven vertical oil wells (working interest 100%).

Woodford “Cana”:
QEP Energy's net production from the Woodford “Cana” play averaged 56 MMcfed (34% liquids) during the fourth quarter 2013. The Company participated in 8 outside-operated horizontal Woodford wells that were completed and turned to sales during the fourth quarter (average working interest 19%). The Woodford “Cana” and Haynesville areas both experienced weather-related production downtime during the month of December.

QEP had two rigs drilling horizontal Woodford wells in the core of the play at the end of the fourth quarter 2013. QEP has a working interest in 44 outside-operated wells that were drilling or awaiting completion at the end of the fourth quarter (working interests ranging from less than 1% to 25%).

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