Clay Gaspar
Executive Vice President and Chief Operating Officer at Devon Energy
Thank you, Rick. Hey, good morning, everybody. In summary, Devon's third quarter impressive results were the result of tremendous execution across nearly every aspect of our business. We had wins in environmental and safety performance, operational improvements, continued cultural alignment, strong well productivity, cost control, significant margin expansion and ultimately, excellent returns on the invested capital. This recurring trend of operational excellence, while managing significant organizational change and macro stress has now been established over multiple quarters and is a testament to the Devon employees and strong leadership throughout the organization. As I look forward to '22 and beyond, I believe we're positioned to continue delivering but also take our performance to an even higher level of cohesion and productivity. Providing the energy to fuel today's modern world is critically important work. I'm very proud of what we do and how we do it. As I look forward to Devon's near and long-term goals, I'm confident in our ability to deliver on society's ever-increasing expectations. Let's turn to slide 13, and we can dig into the Delaware Basin. Devon's operational performance in the quarter was once again driven by our world-class Delaware Basin assets, where roughly 80% of our capital was deployed. With this capital investment, we continue to maintain steady activity levels by running 13 operated rigs and four frac crews, bringing on 52 wells during the quarter. As you can see in the bottom left of this slide, this focused development program translated into another quarter of robust volume growth, and our continued cost performance allowed us to capture the full impact of the higher commodity prices. Turning your attention to the map on the right side. Our well productivity across the basin continued to be outstanding in the quarter. With the results headlined by our Boundary Raider project.
Some may recall that this is not the first time we've delivered on impressive results from this well pad. Back in 2018, our original Boundary Raider project developed a package of Bone Spring wells that set a record for the highest rate wells ever brought online in the ever brought online in the Delaware Basin. Fast forward to today, this addition of the Boundary Raider went further downhole to develop an overpressured section in the Upper Wolfcamp. This project also delivered exceptionally high rates with our best well delivering an initial 30-day production rates of 7,300 BOE per day, of which more than that -- more than 60% of that was oil. I call that pretty good for a secondary target. Moving a bit east into Lea County, another result for this quarter was our Cobra project, where the team executed on a 3-mile Wolfcamp development. This pad outperformed our pre-drill expectations by more than 10%, with the top well achieving 30-day rates as high as 6,300 BOE per day. In addition to the strong flow rates, this activity helped us prove the economics of the Wolfcamp inventory in the area, further deepening the resource-rich opportunity we hold in the Delaware. Turning to slide 14. With the strong operating results we delivered this quarter, high-margin oil production in the Delaware Basin continued to expand and rapidly advance, growing 39% year-over-year. Importantly, the returns on invested capital to deliver this growth were some of the highest I have seen in my career, bolstered by rising strip prices and the capital efficiency improvements we have delivered this year. These efficiencies are evidenced on the right-hand chart, where our average D&C costs improved to $554 per lateral foot in the third quarter, a decrease of 41% from just a few years ago. While we have likely found the bottom of this cycle earlier this year, the team continues to make operational breakthroughs that have thus far fought back most of the inflationary pressure. We continue to win from a fresh perspective, blending teams and also still relatively -- we're still working to know each other pretty early on.
These accomplishments are clearly demonstrated and the great work our team has done to drive improvements across the entire planning and execution of our resource to maintain this high level of performance into 2022, and we are focused on staying out ahead of the inflationary pressures that are impacting not just our industry, but all aspects of the broader society. While our consistency and scale in the Delaware are a huge advantage, the supply chain team is working hard to anticipate issues, mitigate bottlenecks and work with the asset teams to adjust plans to optimize our cost structure and future capital activity. Turning to slide 15. Another asset I'd like to put in the spotlight today is our position in the Anadarko Basin, where we have a concentrated 300,000 net acre position in the liquids-rich window of the play. As you may know, Rick and I both have a historical tie to this basin, and we're thrilled to get to see the great work that our teams are doing to unlock this value for investors. A key objective for us this year in the Anadarko Basin is to reestablish operational continuity by leveraging the drilling carry from our joint venture agreement with Dow. By way of background, in late 2019, we formed a partnership with Dow in a promoted deal where Dow earns half of our interest on 133 undrilled locations in exchange for $100 million drilling carry. With the benefits of this drilling carry, we're drilling around 30 wells this year, and our initial wells from this activity were brought on during the quarter. The 4-well Miller-Miller project is an up-spaced Woodford development in Canadian County and is off to a great start with both D&C costs and well productivity outperforming pre-drill expectations. Initial 30-day rates averaged 2,700 BOE per day, and completed well costs came in under budget at around $8 million per well. While I'm proud of how well the team hit the ground running as we get our processes lined out and efficiencies dialed in, I foresee material improvements in well costs ahead.
The leverage returns from this carried activity will complete -- will compete effectively for capital with any asset in our portfolio. In fact, the strength of natural gas and NGL pricing, the performance we're seeing in the Anadarko Basin will likely command relatively more capital than it did in '21. Moving to slide 16. While the Delaware Basin is clearly the growth engine of our company and we're excited about the upside for the Anadarko, we also have several high-quality assets in the oil fairway of the U.S. that generates substantial free cash flow. While these assets don't typically grab the headlines, their strong performance is essential to the continued success of our strategy. These teams are doing great work to improve our environmental footprint, drive the capital program, optimize base production and keeping our cost structure low. As an example, Williston will generate over $700 million of 2021 free cash flow. Collectively, these assets are on pace to generate nearly $1.5 billion of free cash flow this year. Lastly, on slide 17, with our diversified portfolio concentrated in the very best U.S. resource plays, we have a deep inventory of opportunities that underpin the long-term sustainability of our business model. As you may have heard me talk about in prior quarters, we have a brutal capital allocation process in regards to the competitiveness of how we seek the best investment mix for the company. The first step of this process is to make sure that all the teams are working from the same assumptions and inputs. Since the close of our merger earlier this year, we have undertaken a very disciplined and rigorous approach to characterize risk, forced rank the opportunity set across our portfolio. This inventory disclosure is the result of that detailed subsurface work and evaluation across our portfolio that we converted into a single consolidated platform to ensure consistency. Turning your attention to the middle bar on the chart.
At our pace of activity, we possess more than a decade of low-risk and high-return inventory of what we believe to be in a mid-cycle price deck. As you would expect, about 70% of our inventory resides in the Delaware Basin, providing the depth of inventory to sustain our strong capital efficiency for many years to come. Let me be clear. In this exercise, we are focused on compiling a very important slice of our total inventory. This summary is not meant to convey the full extent of the possible with these incredible resources. These are only operated, essentially all long lateral, up-spaced wells that deliver competitive returns in a $55 oil environment. Moving to the bar on the far right of the chart, we also expect inventory depth to continue to expand as we capture additional efficiencies, optimize spacing and further delineate the rich geologic column across our acreage footprint. We expect a significant portion of the upside opportunities to convert into our derisked inventory over time. Examples of this upside include the massive resource potential in the Lower Wolfcamp intervals, continued appraisal success in the Powder River Basin and the significant liquids-rich opportunity we possess in the Anadarko Basin. The bottom line here is that we have an abundance of high economic opportunity to not only sustain but grow our cash flow per share for many years to come.
With that, I'll turn the call over to Jeff for the financial review.
