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Oasis Petroleum's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Second we’ll be making progress on extensional testing in both the Middle Bakken, and Three Forks and associated well density. With that, the Middle Bakken is largely delineated across our acreage position, even up into North Cottonwood and into Montana. We will also make meaningful progress on the Three Forks this year. We commenced several in-fill and interference tasks in the second quarter to determine the optimal number of wells per horizon, on each spacing unit and to test communication between laterals.

Third, operations optimization, that's optimizing services, including the start-up of Oasis well services, and continuing to evaluate different completion techniques in each of our operated regions to optimize well costs without degrading recoveries, and in some cases, even improving recoveries.

And fourth, infrastructure development. We’re spending a lot of time on infrastructure planning and development to bring down unit costs, as shown in our financial results and improving operating run time and maximizing revenues on both oil and gas. We’re also beginning to realize cost reductions for both drilling and completions. We’re expecting to knock off approximately 10% from current well costs by the end of this year. And with the additional savings from pad development, we’ll be able to have an even larger impact on capital costs during 2013.

With the second quarter, we produced a record average of 20,353 BOEs per day, an increase of 2,720 BOEs per day or 15% over the first quarter of 2012, and we were able to outperform our guided production range of 18,000 to 19,500 BOEs per day for the second quarter. On total completions, we initially planned to complete 22 to 44 wells in the quarter, a pace slightly below our first quarter. Due in part to mild weather, but in large part to our team continuing to push operational improvements, we were able to complete 26 gross operated wells in the quarter. These 26 gross operated wells had a 78% working interest on average compared to our budget of approximately 70%.

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