How much would a $1,000,000 of LOE savings impact the IRR of your next infill? Here's how to do it...

I can tell you how to save hundreds of thousands or even a million dollars of LOE over the life of an infill. Have you ever considered how your surface location impacts the costs to build pipelines? Have you ever considered how those costs are eventually passed on to the operator in one way or another?

Except for making sure the stake isn't too close to a nearby pipeline, pipelines are rarely on the operator's radar this early in the process. Common considerations are easy to work with landowners, distance to offsetting wells (farther = better?), topography, soil stability, geological, future PUDs (reuse the surface location in the future?), etc.

i.e. If you're drilling a two mile lateral, you will likely choose a surface location on the north or south sides of the unit. If that choice takes you two miles farther from your preferred pipeline provider (water, oil, and/or gas), the operator will end up paying for that additional pipeline cost in the long run.

• Is that problematic landowner worth a little more effort now?
• Surface damage act not so bad now?
• Is the extra lease road worth the additional costs now?
• Is the extra topography on your surface location worth it now?
• Is the extra cost to buyout that nearby vertical well worth it now?
• What about putting a pad in the middle of two opposing direction units? One pad with wells going north and south from it.

This is not a viable option on every well. If you drill enough wells, though, you'll certainly come across some of these opportunities. Speaking from experience, operators regularly fail to consider the pipeline locations when they're choosing a surface location.?Many of the same obstacles you're intentionally trying to create distance to may also cost you much more than you realize the future.

Work with and partner with your trusted vendors. Sharing a little more information, a little earlier in the planning stage could yield you significant returns on that extra meeting or two. Good vendors want to help you succeed. Consider letting them. Don't forget that vendors get a free lunch when they buy you lunch too.