CrownQuest
18 Desta Dr , Midland, Texas, United States

Based in Midland, Texas, we operate in several areas of the continental United States, primarily in the Permian Basin. We are an active driller and seek to expand our leasehold in the Permian Basin.

At CrownQuest, we’re not just focused on achieving technical excellence and maximizing our production. We also place a premium on integrity and value in every aspect of our operations. Our execution of this philosophy is simple and straightforward:

• We do what we say we’re going to do
• We design deals that work for both parties
• We are committed to providing swift responses

Relationship between CrownQuest Operating, LLC and CrownRock, L.P.

CrownQuest entered into an administrative support agreement with CrownRock, L.P. at the time of CrownRock’s formation in 2007. Substantially all of the time of CrownQuest’s employees is allocated to the operation of CrownRock’s properties and the provision of general and administrative services to CrownRock. In addition, CrownQuest operates approximately 98% of CrownRock’s total net wells, and the wells CrownQuest operated for CrownRock provided approximately 98% of CrownRock’s average daily production in 2018.

CrownRock, L.P.

CrownRock, L.P. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. Our assets are located in Texas, New Mexico and Utah, and our operations are primarily focused on the development of our core Permian Basin assets. We were organized as a limited partnership in February 2007 by affiliates of our management team and Lime Rock Partners IV, L.P., a private equity fund focused on the oil and gas industry.

Midland Basin

CrownRock’s core properties, and therefore the properties which CrownQuest operates, consist of approximately 82,000 net acres in what we consider to be some of the best acreage in the Permian Basin of West Texas, specifically, the Northern Midland Basin.  This is where we are focusing primarily on drilling horizontal targets on multiple benches.  The Permian Basin of West Texas is characterized by an extensive production history, predominately oil-focused drilling targets, extensive infrastructure, wells with long reserve lives and multiple producing horizons.  The Wolfberry play is a modification and extension of the Spraberry play, while the Wolfcamp and Spraberry shale play utilizes horizontal drilling in the historic Spraberry play, the majority of which is designated in the Spraberry Trend Area Field.  According to the latest information available from the Energy Information Administration of the U.S. Department of Energy (the “EIA”), the Spraberry Trend Area ranks as the second largest oilfield in the United States by proved reserves and by estimated oil production. Based on the returns we have generated through our drilling to date, the number of undrilled locations in our drilling plan, and our observation of the activity and results of other operators in this area, we believe the Midland Basin represents one of the premier oil and natural gas development opportunities in North America.  We have implemented and continue to refine an ongoing optimization program with the goal of maximizing value from development of our acreage position.  We collect, and broadly distribute among our technical staff, data on well and completion design, well spacing, and well performance.  We encourage active and cross-disciplinary communication and strive to consistently adjust our operations based on observed data.  From October 2007 through December 2014, we primarily focused on drilling vertical wells in the Midland Basin.  In January 2015, we initiated our horizontal program, with our first horizontal well coming on line in March 2015.  We spent much of 2016 and the beginning of 2017 preparing to accelerate our horizontal activity.  This included identifying potential horizontal drilling locations plus identifying optimum spacing between wells, including interval spacing between zones or benches.  We believe our horizontal well inventory will be developed most efficiently through full section development, which is the practice of drilling multiple wellbores in a section and completing the wellbores after the multiple wellbores have been drilled.  During 2017, we increased horizontal drilling, and drilled approximately 60% more horizontal wells as compared to 2016.  Also during 2017, we continued to engineer our optimal spacing development program, which resulted in a build-up of an inventory of drilled but uncompleted wells in order to concurrently complete wells in each spacing unit block.  During 2018, we continued our acceleration of our horizontal drilling, mainly drilling multi-well pads.  We drilled approximately 27% more horizontal wells as compared to 2017.  From January 2015 through December 31, 2018, we have drilled or were drilling 153 gross horizontal wells in the Midland Basin, eight of which were drilled in 2015, 27 of which were drilled in 2016, 52 of which were drilled in 2017 and 66 of which were drilled in 2018.  Also, during the same period, we have drilled four gross horizontal wells in the area targeting zones other than the Wolfcamp and Spraberry shale play.  Our horizontal drilling results and the drilling results by operators offset to our acreage have led us to further assess our horizontal drilling inventory and expand our horizontal development plan.  Our total production of oil and natural gas in 2018 of 15.4 MMBoe has increased significantly compared to our production during 2017 of 9.2 MMBoe.  We believe we will continue to experience significant production growth as we implement our horizontal drilling plan through 2019 and in coming years, increase the number of horizontal rigs we are running and increase the percentage of our horizontal wells that are completed and producing.   We believe, based on our analysis of data acquired through our horizontal drilling program during 2015 through 2018 along with the horizontal drilling results achieved by operators offset to our acreage, that multiple benches contained within our acreage may be prospective, which could substantially increase the ultimate hydrocarbon recovery of each surface acre we have leased in the Permian Basin.  We believe there are a significant number of horizontal locations on our acreage that will allow us to target the Wolfcamp, Spraberry, Pennsylvanian and Clearfork/San Andres formations.  Although our emphasis is on our horizontal program, we continue to strategically drill vertical wells in order to hold acreage to all recognized productive depths, optimize capital returns in our best areas, and assure the continuation of our horizontal program.  From October 2007 through December 31, 2018, we have drilled 1,151 gross vertical wells in the Midland Basin.  From late 2007 through 2013, we drilled and participated in a large number of Wolfberry vertical tests. By the beginning of 2011, we had largely refined our drilling and stimulation process and moved into a larger scale development mode.