Newfield Exploration Company (NYSE:NFX) has increased the company's leasehold and is accelerating the development of its resource base in the Uinta Basin. The company has thousands of drilling locations to exploit into multiple formations on its acreage here.
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Summary
Newfield Exploration Company has been active in the Uinta Basin for many years, building a position slowly since 2004. In May 2011, Newfield Exploration Company closed on two acquisitions in the Uinta Basin, increasing the company's total leasehold to 250,000 net acres.

Production
Newfield Exploration Company expects to have average daily production of 20,000 barrels of oil equivalent (BOE) per day in 2011 from the Uinta Basin, and grow this 25% to 25,000 BOE per day in 2012.

Acceleration
Newfield Exploration Company has decided to accelerate development of the Uinta Basin in 2012 and will increase the company's operated rig count from five to as many as nine rigs in 2012. The company will spend between $400 million and $550 million in 2012, up from $370 million in 2011.

Green River
Newfield Exploration Company has the most experience in developing the Green River sands formation, which is present over 165,000 net acres of its leasehold in the Uinta Basin. The company plans to drill 300 wells here in 2011 and between 250 and 300 more wells in 2012.

The average Green River well yields only 75,000 BOE of reserves, but the shockingly cheap average cost of only $930,000 per well puts the internal rate of return before taxes at over 100% (using $100 per barrel for oil). The company estimates that its total resource potential from the Green River sands is 360 million BOE.

Uteland Butte
One relatively new area for Newfield Exploration Company is the Uteland Butte horizontal oil play, which is present on 200,000 net acres. The company is targeting various oil bearing formations here and has drilled six horizontal wells to date on its acreage, with initial production rates averaging approximately 500 BOE per day.

Newfield Exploration Company estimates that it has more than 1,800 drilling locations and 300 million BOE of potential mineral resources in this play. The company plans 10 wells in 2011 and at least 30 wells in 2012.

Wasatch
Newfield Exploration Company also disclosed the development of the Wasatch play, covering 70,000 net acres of the company's leasehold. The company has a number of different formations to develop here, ranging from inexpensive shallow areas to more complex deeper zones.

Newfield Exploration Company estimates 45 million BOE of resource potential here and will drill fifty wells in 2012.

Other Players
Other operators in the Uinta Basin include El Paso (NYSE:EP), which is active in the Altamont area and estimates that it has 125 million BOE of risked resources here. Bill Barrett Corporation (NYSE:BBG) is also involved with the Uinta Basin and recently closed on a $120 million acquisition of leasehold here.

Gasco Energy (NYSE:GSX) has operations at the Riverbend Project in the Uinta Basin, and is seeking two drilling permits for wells into the Green River formation.

The Bottom Line
Newfield Exploration Company's recent pronouncement on the Uinta Basin has proven that the United States has more oil and gas resources than most realize. The company's experience and expertise as an operator should give most investors confidence that the resources can be develop efficiently to create shareholder value. (For additional reading, check out Unearth Profits In Oil Exploration And Production.)

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