Blackbeard Operating is leading a horizontal drilling resurgence on the Central Basin Platform, a legacy oil basin that’s drawing industry attention once again.
The Blackbeard team has shied away from expensive deals in the Permian’s deeper Midland and Delaware basins, land tightly held by the oil supermajors and large independents.
Fort Worth, Texas-based Blackbeard has been in other regions over the years, including the Midcontinent, Barnett Shale and South Texas, co-founder and CEO Kaleb Smith told Hart Energy.
Today, Blackbeard’s hideout is the Central Basin Platform (CBP), the very region where vertical wells first ignited the West Texas oil boom over a century ago.
Blackbeard has gained extensive vertical experience on the CBP since launching in 2014 with NGP backing, drilling more than 750 verticals to date.
But it’s the application of horizontal drilling to the CBP’s oily stacked pay that’s unlocking new growth for Blackbeard. The company drilled its first horizontal well in the second quarter of 2021 and has drilled over 225 since then.
Blackbeard shifted to multi-well pad development in the second half of 2024, pushing production to new levels. The company produced over 40,000 boe/d net in the first quarter.
The company plans to have four drilling rigs operating this summer.
“What we’re targeting is what we consider unconventional conventional rock,” Smith said at Hart Energy’s SUPER DUG Conference & Expo in May. “There are some carbonates and some shales in there, but ultimately you’re drilling horizontal wells.”
Oil in place
There’s significant oil and gas resource left to be recovered from the CBP, yet few producers are actively pursuing it.
The CBP is dotted with thousands of legacy vertical wells, as well as some early horizontal tests with varying results.
Much of the CBP’s leasehold remains in the hands of major oil companies and large public operators that have held positions there for decades, like Exxon Mobil, Occidental Petroleum, ConocoPhillips and Apache.
Those companies have shifted their focus to the deeper, unconventional plays of the Permian, Midland and Delaware basins, leaving the CBP behind.
But Blackbeard and a few peers are going after the oil left in place on the CBP.
“Everybody thought [the CBP was] drained,” said Jordan Barrett, Blackbeard’s CFO and head of business development. “Then new technology comes, and you continue to access more of that oil that was still down there.”
Blackbeard has successfully targeted 13 individual benches on the CBP with horizontal wells. Kareem Ahmed, Blackbeard co-founder and COO, said the company’s CBP wells are generally shallower and require less intensive fracs than Midland or Delaware shale wells.
“We’re not 10,000 ft deep and 3 miles out,” Smith said. “We’re 2,400 or 5,000 ft deep and a mile or 2 miles out.”
While other CBP producers have focused on the San Andres horizontal play, Blackbeard has looked elsewhere—like the McKnight, Judkins, Tubb, Clear Fork and Wichita-Albany benches. The Wolfcamp has also been a prolific target for the company.
Looking forward, Blackbeard sees opportunity in the deeper Barnett and Woodford zones. Earlier this year, Texas state regulators approved Blackbeard drilling a horizontal well targeting the Woodford formation.
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Pad development
Gross production growth hit “an inflection point” when Blackbeard started pad development last year, Smith said.
Blackbeard shifted from single-well tests to 6 and 8-well pads, like multi-well projects seen in the Midland and Delaware basins.
“It took some time to finally get the confidence from single wells to then pivot to multi-well pads,” Ahmed said.
In other areas, Blackbeard has assets where delineation is still underway with single-well projects. The company aims to bring those into full pad development in the future.
Bigger projects also enhance drilling efficiencies in the field.
“We saw a 35% reduction in just frac costs alone as we went to pad development,” Smith said. “But we’re also seeing a lot of simul-frac benefits—actually seeing better well performance in general as we produce everything together.”
“It’s almost like you could drill five wells and get one free,” he said.
Being in the middle of the Permian has its benefits from a cost and services standpoint. Blackbeard might not be in the Midland or Delaware, but rigs, sand, steel and other oilfield goods travel around its acreage every day.
“Wireline trucks, workover rigs, frac crews, all of those guys have the benefit of their shops being there because of the Midland and Delaware basins,” Ahmed said. “And we’re just able to leverage that.”
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Minerals, midstream and surface
Blackbeard’s empire stretches beyond upstream, as parent company Blackbeard Holdings builds out minerals, midstream and surface assets to create a fortress on the CBP.
Out of the 77,000 net acres Blackbeard has on the CBP, around 36,000 are mineral acres, Smith said.
The company also owns around 50,000 surface acres in the CBP, which it uses for several revenue streams. Blackbeard has a sand mine on its ranch that services the Midland and Delaware basins.
“People are recognizing there’s significant cash flow associated with surface operations,” Ahmed said.
Other Permian companies with heavy minerals and surface portfolios, like Texas Pacific Land (TPL), Viper Energy Partners and LandBridge, have gained momentum in the public markets.
“Within Blackbeard, we basically have a TPL or a LandBridge,” Smith said. “We own a significant amount of surface and the minerals underneath it.”
Blackbeard has had to take other matters into its own hands to succeed on the CBP. The company made significant investments in owning its own oil, gas and water takeaway and disposal infrastructure.
Blackbeard owns around 400 miles of crude, gas and water pipelines serving its own production and third-party E&Ps.
“We spent over $170 million in capex to build out our midstream business,” Smith said.
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