Myriad stacked pays in the West Texas Permian Basin present operators with a conundrum of choices when looking to open up conventional zones with horizontal drilling technology. But a review of third-quarter reports reveals the horizontal Wolfcamp play in particular is attracting a flurry of activity.

The Permian Midland Basin horizontal Wolfcamp is oily, consistent and large, says Irene Haas, an analyst with Wunderlich Securities Inc. “In less than nine months, the play moved from being an exploration idea to a real and meaningful new oil trend.”

Pioneer Natural Resources Inc. has reported its first horizontal well in the play. XBC Giddings Estate #2041H had a peak 24-hour rate of 854 barrels of oil equivalent (BOE) per day (591 barrels of oil, 86 barrels of natural gas liquids and 332,000 cubic feet of gas per day) on a restricted rate due to flow-line constraints. The well currently flows naturally with a peak seven-day average rate of 732 BOE per day.

“This play is going to end up being one of the major oil-focused plays over the next several years,” Pioneer chairman and chief executive Scott Sheffield said in a conference call with analysts. “This result, coupled with the strong production from other industry players drilling horizontal wells in this interval, and Pioneer’s extensive geologic interpretation of the area, suggests significant horizontal Wolfcamp shale potential exists within Pioneer’s acreage.”

The well, the first Wolfcamp horizontal in Upton County, features a 5,800-foot lateral placed between the Upper and Middle Wolfcamp formations—an 800-foot-thick zone—with 30 stages. Based on microseismic analysis, the company believes it has successfully stimulated all of the zone that is 400 feet above and below the wellbore.

Pioneer is focusing its efforts on more than 200,000 acres in the southern part of the field in the Midland Basin, a region it has left largely untouched over the last 30 years due to poor vertical-well economics. A second horizontal Wolfcamp shale well is currently being drilled in Upton County, and two additional wells are planned in 2012 in Reagan County. The Upton County well will extend to 6,000 feet in the lateral, with subsequent wells reaching to 7,000 feet and beyond, Sheffield said.

“We think the optimum will be 7,000-plus feet going forward.”

Pioneer’s horizontal Wolfcamp wells currently cost between $6-and $7 million, including the science work. The company has one rig in the play and anticipates adding two rigs in 2012. Based on 140-acre spacing, Pioneer holds more than 1,000 prospective locations in the play.

“That position could hold a total of 320 million BOE,” says Dan Morrison, a research analyst with Global Hunter Securities. Tighter spacing could yield more than 1,600 locations and 500 million BOE, he says.

EOG Resources Inc. is further along in the play, operating a two-rig program with 26 horizontal wells completed, most in Irion County and along the Crockett County line. The company’s last three wells averaged between 1,200 and 1,300 barrels of oil and 900,000 to 1.2 million cubic feet of rich natural gas.

These wells are drilled with 7,000- to 7,500-foot laterals stimulated with 30 to 34 stages. Well costs have come down 40% to $5.5- to $6 million, and from 20 days to 12 days to drill. EOG is developing its own frac-sand mining and processing operation to further lower costs.

“It’s a strong play for us with a lot of upside,” EOG president William Thomas said in a conference call. To date EOG wells have targeted Middle Wolfcamp, but several wells in the completion process target Upper Wolf-camp. If both zones are successful, “we will alternate targets,” Thomas said.

EOG has 131,400 acres in the play with an estimated 40 million BOE resource potential.

“While EOG does not have as large a footprint in this play as it has in the Eagle Ford, we believe that this play is significant enough to move the dial for EOG,” says analyst Haas. “We continue to see better and better results; we like the way the play is progressing.”

El Paso Corp. reported it has completed seven Upper Wolf-camp horizontal wells. The most recent, UL-43-17-1H, tested at a 24-hour rate of 1,270 barrels of oil and 591,000 cubic feet of gas (1,369 BOE) per day. This well has a 7,500-foot lateral and 25 stages.

The company has 138,000 acres, mostly in Reagan and Crockett counties, with 800 Upper Wolfcamp locations. It has two rigs currently operating in the play.

Fort Worth, Texas-based Approach Resources Inc. drilled three horizontal Upper Wolfcamp wells in the third quarter with 7,300- to 7,800-foot laterals with 23-stage completions. The 24-hour initial production rates ranged from 798 to 1,044 BOE per day. Two more wells are waiting on completion, and the company plans a well to test Lower Wolfcamp, or the “C” zone.

“Frac density at approximately 330 feet leaves upside potential as competitors have had success with tighter-spaced frac stages between 230 and 300 feet,” says Wells Fargo analyst Gordan Douthat. The company is targeting 30 to 35 frac stages going forward. “Should the ‘C’ bench be successful, (that) would open up additional horizontal locations across the acreage.”

“We believe Approach is sitting on a world-class oily play,” says Haas.

The Wolfcamp is attracting integrated majors, as well. ConocoPhillips is paying upward of $6,000 an acre for leases in Upton and Reagan counties, she notes.

“We like the fact that this play is attracting some serious heavyweights. In addition to validating the play concept, these players will accelerate technology transfer,” says Haas. “With year-round drilling and a well-established regulatory framework, we expect to see this play take off, much like the Eagle Ford play in South Texas.”