Clay Gaspar
Executive Vice President and Chief Operating Officer at Devon Energy
Thanks Rick, and good morning everyone. As Rick touched on from our operations perspective, Devon continues to deliver outstanding results. Our Q2 results demonstrate the impressive operational momentum we established in our business, the power of Devon's asset portfolio and the quality of our people delivering these results. I want to pause and congratulate the entire Devon team for the impressive work overcoming the challenges of the pandemic and the merger, while not only keeping the wheels on, but re-questioning everything we do and ultimately building better processes along the way. We've come a long way on building the go-forward strategy, execution plan and culture, and I see many more significant wins on the path ahead.
Turning your attention to Slide 12. My key message here is that we're well on our way to meeting all of our capital objectives for 2021. At the bottom left of the slide, you can see that my confidence in the '21 program is underpinned by our strong operational accomplishments in the second quarter. With activity focused on low-risk development, we delivered capital spending results that were 9% below plan, well productivity in the Delaware drove oil volumes above guidance and field level synergies improved operating costs. While the operating results year-to-date have been great, the remainder of the year looks equally strong. A true test of asset quality, execution and corporate cost structure proves out in sustainably low reinvestment rates, steady production and significant free cash flow. This is exactly what we're delivering at Devon. We plan to continue to operate 16 rigs for the balance of the year and deliver approximately 150 new wells to production in the second half of 2021.
Now let's turn to Slide 13, where we can discuss our world-class Delaware Basin asset, which is the driving force behind Devon's operational performance. During the quarter, our capital program consisted of 13 operated rigs and four dedicated frac crews resulting in 88 new wells that commenced first production. This level of capital activity was concentrated around the border of New Mexico and Texas and accounted for roughly 80% of our total company-wide capital investment in the quarter. As a result of this investment, Delaware basins high-margin oil production continue to rapidly advance growing 22% on a year-over-year basis.
While we had great results across our acreage position, a top contributor to the strong volume were several large pads within our Stateline and Cotton Draw areas, that accounted for more than 30 new wells in the quarter. This activity was weighted towards development work in the Upper Wolfcamp, but we also had success co-developing multiple targets in the Bone Spring within our Stateline area. The initial 30 day rates from activity at Stateline and Cotton Draw average north of 3,300 Boe per day and recoveries on track to exceed 1.5 million barrels of oil equivalent. With drilling and completion costs coming in at nearly $1 million below pre-drill expectations, our rates of return at Cotton Draw and Stateline are projected to approach 200% at today's strip pricing. While we've all grown weary of quoted well returns, this is the best way that I can provide insight to you on what we're seeing in real time and what will be flowing through the cash flow statements in the coming quarters.
While we lack precision in these early estimates, I can tell you, these are phenomenal investments and will yield significant value to the bottom line of Devon and ultimately to the shareholders through our cash return model. And lastly, on this slide, I want to cover the recent Bone Spring appraisal success that we had in the Potato Basin with our three well Yukon Gold Project. Historically we focused our efforts in the Wolfcamp formation in this region and Yukon was our first operated test in the second Bone Spring interval in this area. Given the strong results from Yukon plus additional well control from non-operating activity, this will be a new landing zone that works its way into the Delaware Basin capital allocation mix going forward. This is another example of how the Delaware Basin continues to give. This new landing zone required no additional land investment, very little incremental infrastructure and as a result the well returns have a direct path to the bottom line of Devon.
Moving to Slide 14. Another highlight associated with the Delaware Basin activity was the improvement in operational efficiencies and the margin expansion we delivered in the quarter. Beginning on the left hand side, our D&C costs have improved to $543 per lateral foot in the quarter. A decline of more than 40% from just a few years ago. To deliver on this positive rate of change, the team achieved record setting drill times in both Bone Spring and Wolfcamp formations with spud release times and our best wells improving to less than 12 days. Our completions work improved to an average of nearly 2,000 feet per day in the quarter. I want to congratulate the team and I fully expect that these improved cycle times will be a tailwind to our results for the second half of the year.
Shifting to the middle of the slide. We continue to make progress capturing operational cost synergies in the field. With solid results we delivered in the second quarter LOE and GP&T costs improved 7% year-over-year. To achieve this positive result, we adopted the best and most economic practices from both legacy companies and leveraged our enhanced purchasing power in the Delaware to meaningfully reduce costs associated with several categories, including chemicals, water disposal, compression and contract labor. Importantly, these results were delivered by doing business in the right way with our strong safety performance in the quarter and combined with company delivered some of the meaningful environmental improvements over year-over-year basis.
And my final comment on this slide on the chart to the far right, the cumulative impact of Devon's strong operational performance resulted in significant margin expansion compared to both last quarter and on a year-over-year basis. Importantly, our Delaware Basin operations are geared for this trend to continue over the remainder of the year and beyond.
Moving to Slide 15. While the Delaware Basin is clearly the growth engine of our company, we have several high-quality assets in the oil fairway of the US that generate substantial amounts of free cash flow. These assets not only captured many headlines but they underpin the success of our sustainable free cash flow generating strategy. In the Delaware Basin, cash flow nearly doubled in the quarter on the strength of natural gas and NGLs. Our Dow joint venture active -- activity is progressing quite well and we're bringing on the first pad of new wells this quarter. The Williston continues to provide phenomenal returns and at today's pricing, this asset is on track to generate nearly $700 million of free cash flow for the year. In the Eagle Ford, we have reestablished momentum with 21 wells brought online year-to-date resulting in second quarter volumes advancing 20%. And in the Powder River, we're encouraged with continued industry activity and how -- in evaluating how we create the most value from this asset. We have a created and commercially focused team working this asset, many of which bring fresh set of eyes on how we approach this very substantial oil-rich acreage position. Overall, another strong quarter of execution and each of these asset teams do a great job delivering within our diversified portfolio.
And lastly, on Slide 16, I want to conclude my prepared remarks with a few thoughts on the environmental performance targets we recently published. The team here at Devon takes great personal pride in delivering affordable and reliable energy that powers every other industry out there as well as the incredible quantity and quality of life we appreciate today. We absolutely believe that in addition to meeting the world's growing energy demand, we must also deliver our products in an environmentally and commercially sustainable way. As you can see with the goals outlined on this slide, we're committing to taking a leadership role by targeting to reduce greenhouse gas emissions by 50% by 2030 and achieving net zero emissions for Scope 1 and 2 by 2050. A critically important component of this carbon reduction strategy is to improve our methane emissions intensity by 65% by 2030 from a baseline 2019. This emissions reduction target involves a range of innovative -- innovations, including advanced remote leak detection technologies and breakthrough designs like our latest Low-E facilities in the Delaware Basin. We also plan to constructively engage with upstream and downstream partners to improve our environmental performance across the value chain. While it's a journey, not a destination, environmental excellence is foundational to Devon.
With that, I'll turn the call over to Jeff for the financial review.
