UPDATED: April 11, 2017
The headlines continue to highlight positive developments by operators in the SCOOP/STACK plays in Oklahoma. But who is participating in the production streams BESIDES the operator? What non-operated interests or overriding royalty interests are participating right alongside the operator?
Or who was the initial grantee actually leasing for?
We’re lifting the curtain with the release of assignments in the SCOOP/STACK—in a big way!
Here’s what we’ve released..
Find out what’s been assigned—and what’s not been assigned…yet. Create AOIs around the areas that you want to watch for future opportunities, and do it with this level of detail.
Not only can our customers view assignments online within Drillinginfo, they can also create a leasing report in Drillinginfo for areas that they’re interested in. An example is this report on Kingfisher County, OK (STACK play) which shows 1 of 11 new leases taken as recently as 3/15/2017.
Use this tab in Drillinginfo to start creating custom reports.
Combining customized leasing reports with the power of our DI SCOOP/STACK play assessments is a powerful enhancement to operators who want to unlock current opportunities in these plays.
On November 16, 1907, Oklahoma became the 46th state to enter the Union. About a decade before that, in the then Indian Territory, Miss Jenni Cass dropped a “go devil” detonating device downhole and The Nellie Johnson no. 1 well became the first commercially viable oil well in the Territory. Fast forward to July of 2015 and we find the State of Oklahoma contributing the 6th most crude oil and 3rd most natural gas in the country. Not only is Oklahoma therefore in a combined 5th place in terms of energy resource production, it is also the home to the Cushing hub, where orders for West Texas Intermediate (WTI) oil futures are settled for the New York Mercantile Exchange.Much of the news that comes out of Oklahoma lately centers around the disposal water quake controversy, and relative financial health of a few of the very large operators who are headquartered there. The recent selection of Paul Ryan as Speaker of the House has an interesting Oklahoma angle given that his wife Janna Little Ryan’s family has a rich Oklahoma political history. (Their family dogs are Boomer and Sooner).
Of particular interest to me is that when we look at a current heat map of permitting activity for the past 30 days, coupled with current active rigs, we clearly see that Oklahoma, particularly the Woodford Shale play in the Anadarko basin, is one of the nation’s bright spots.
Image Source: Drillinginfo Activity Maps
The SCOOP and The STACK
We’ve written about the South Central Oklahoma Oil Province, or SCOOP, before and how it’s exciting because it tends to be a little more liquids-rich. Operators, such as Magnolia, continue to expand their drilling plan for the play.
The competitive (because of geography and branding more so than geology) Sooner Trend Anadarko Basin Canadian and Kingfisher Counties, or STACK play has started to get a lot of interest lately, also due to its potential for liquids. STACK operator Newfield Exploration is one of the best-performing stocks in the S&P 500 this year.
In a presentation earlier this year, another STACK devotee, Felix Energy, talked about the performance they have been getting from applying new technology to the play area. 3 things caught my eye in this presentation:
- No produced formation water – they’re drilling for hydrocarbons and not having to deal with water disposal (!)
- Horizontal redevelopment with modern stimulations has yielded tremendous economic results – New horizontal wells 50x original vertical wells (!)
- Proponent of Slick Water proppant, and in 2015 using up to 2000#/ft (!)
The Woodford Shale and Hunton Group and the more recently targeted Springer Shale span from the late Ordovician into the Mississippian in geologic age.
Image Source: Drillinginfo South-Central Oklahoma Basins Play Assessment materials
If we look at the last 90 days of rig counts by county in the Woodford Shale, we see a slight pullback in the clear leader Grady from 16 to 12 rigs, a slight contraction from 8 to 7 in Canadian County, and a nice rally in Blaine County from 3 to 8. The Other STACK County, Kingfisher, is riding in fourth place, having gained a rig over that time period.
Image Source: Drillinginfo Rig Analytics
Looking at that same time period in just SCOOP and STACK counties, and cross referencing the targeted formations, we see a clear preference for the deeper Woodford and Hunton formations.
Image Source: Drillinginfo Rig Analytics
Woodford Shale New Production Capacity
On November 12, Drillinginfo will release its latest DI Index of New Production Capacity (NPC), which couples rig activity with active permits, compares the new wells’ performance with comparable wells, and creates an estimate for the capacity that will be brought online from that well in the next few months. This next image compares the NPC for Woodford Shale counties from October’s activity.
Image Source: Drillinginfo Basin-Level NPC reports
The amount of natural gas capacity coming online from the more easterly Hughes and Pittsburgh Counties is certainly striking, all the more so given that there are only 8 rigs generally running around the two. Just more evidence about how much more efficient the gas producers are getting at their game.
Next, Two of the top Five counties on the chart are Canadian and Kingfisher (and the final top fiver is neighbor Blaine), further reinforcing the current investment (and potential results) of the STACK play. And then, also with respectable numbers, Stephens, Grady, Garvin, and Carter show how the heart of the SCOOP is performing.
What do you think? Leave a comment below.
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