WPX Energy Inc. (WPX) is out to hack its spud-to-release costs and seize more land in the San Juan Gallup oil play.

So far, WPX is doing both. The company completed the purchase of 14,300 net acres in the Gallup oil window from an undisclosed seller for $26 million, the company said June 22. Its goal is to cut drilling costs by 5% from $4.2 million.

The acquisition adds an estimated 100 gross drilling locations, boosting WPX’s tally in the San Juan Gallup to about 500, the company said. It now owns or controls about 100,000 acres in the core of the Gallup oil window, where it has spud more than 100 wells since 2013.

“In our total company net asset value model [2P NAV], we value San Juan Basin Gallup acreage at $2,500 per acre, so the deal looks accretive to NAV,” said Andrew Coleman, analyst, Raymond James Equity Research.

WPX Energy, San Juan Basin, Gallup, oil, table The deal reflects the company’s confidence in bringing wells costs down to $4 million and EURs up to 450,000 barrels of oil equivalent (boe) per well, said Rick Muncrief, president and CEO.

“We’re very pleased with the productivity of our Gallup wells and our ongoing improvements in drilling times and cost reductions,” Muncrief said.

WPX reported first-quarter 2015 Gallup oil volumes of 8,100 barrels per day. The company has lowered its WTI differentials to $8-$10 from $13.

WPX decreased its spud-to-rig release time in the Gallup oil play to 10.3 days per well in during the first quarter of 2015, trimming 18% from its fourth-quarter 2014 average of 12.5 days.

Drilling times have continued to fall since the first quarter. The company recently drilled two Gallup wells in less than eight days each. So far in the second quarter of 2015, WPX is averaging 9.8 days per well.

As of June 22, WPX holds more than 230,000 net acres in the San Juan, including gas acreage and is operating two rigs in 2015.

“We believe continuing to add acreage to the San Juan is a prudent move for WPX,” said Brian Gamble, research director, Simmons & Co. International. “Other larger acreage blocks in the area may be acquirable in the not too distant future and we would expect WPX to heavily evaluate any available oil acreage for purchase.”

WPX hasn't been shy about taking advantage of opportunities.

As of May, WPX had completed $1.5 billion in transactions in the past 12 months.

In the first quarter of 2015 WPX closed $600 million in transactions, including the sale of its Apco Oil and Gas international assets. On May 27, the company received about $200 million cash for Marcellus Shale oil and gas interests, which also released it from about $390 million in payment obligations associated with moving natural gas via pipeline.

The company continues to market its Powder River Basin and remaining Marcellus acreage.

Contact the author, Darren Barbee, at dbarbee@hartenergy.com.