Chord Energy just delivered a first quarter for the record books, but the excitement surrounding the impending Enerplus merger seems to be overshadowing a potential seismic shift in the company's standalone operations: the relentless pursuit of longer laterals. While the 3-mile lateral story is well-known, Chord is dropping hints about a 4-mile lateral program that could redefine Bakken economics. Could this quiet giant be on the verge of unlocking unprecedented value, even before the Enerplus synergies kick in?

Chord's recent call contained a curious mix of confidence and caution regarding the already impressive 3-mile lateral program. They acknowledge the possibility of exceeding their initial 80% productivity assumption for the third mile, a figure that's already transforming the play's efficiency. But they're holding back on increasing EUR uplift assumptions until more data rolls in, likely towards the end of the year.

This meticulous data-driven approach is characteristic of Chord's operational philosophy. They've consistently proven themselves to be meticulous operators, prioritizing sustainable free cash flow and a flat-plus production profile over aggressive growth. This is evident in their decision to maintain full-year oil volume and capital guidance despite outperforming in the first quarter.

So why the hesitation to tout the potential upside of the 3-mile program? One plausible explanation: they're already looking beyond 3 miles, quietly laying the groundwork for a 4-mile lateral revolution.

Clues Pointing to 4-Mile Lateral Program

Consider these breadcrumbs scattered throughout the call:

Cleanout Confidence: Chord repeatedly emphasizes achieving TD on essentially all their 3-mile wells. This cleanout mastery is critical for longer laterals, where maintaining wellbore integrity over greater distances becomes increasingly challenging.Four-Mile Timeline: Chord explicitly states they expect to drill their first four-milers later this year. This isn't a tentative exploration, but a concrete plan with a defined timeline, suggesting a high degree of internal confidence. Geometry Gains: Chord highlights the limitations of lease geometry in preventing some areas from transitioning to 3-mile laterals. Four-mile laterals could overcome these constraints, unlocking value from acreage previously considered suboptimal for longer laterals.

Potential Impact of 4-Mile Laterals

The implications of a successful 4-mile lateral program are staggering. While Chord is cautious about quantifying the potential gains, a simple extrapolation from their 3-mile assumptions provides a tantalizing glimpse:

Lateral LengthEUR Uplift (vs 2-mile)Capital Increase (vs 2-mile)3-mile40%20%4-mile (Hypothetical)60%30%

Of course, this is just a hypothetical scenario, and real-world results may vary. However, it underscores the immense potential of Chord's quiet pursuit of longer laterals. The Enerplus merger will undoubtedly enhance Chord's scale and profitability, but the company's standalone operational prowess should not be overlooked. Chord's 4-mile lateral program is a potential game-changer, quietly brewing beneath the surface of the merger fanfare. If they crack the code, Chord could be sitting on a value creation engine that dwarfs even the most optimistic synergy projections.

Drilling Time Improvement

Chord has significantly improved drilling times over the last year, driven by optimizations in bit design, mud properties, and overall well design. This chart illustrates the improvement in drilling days:

"Fun Fact: Chord Energy's headquarters is in Houston, Texas, a city known for its deep connection to the oil and gas industry. It's fitting that a company poised to revolutionize Bakken drilling is headquartered in the heart of the energy world."