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INTRO TO THE SALE

The W.T. Waggoner Estate Ranch is a behemoth piece of Texas land with a legacy to match. With over half-a-million acres spread over six counties, it’s reportedly the largest U.S. ranch within one fence. The sale of the property was mandated by a judge after the Waggoner heirs could not agree how to liquidate, and on February 9 NFL Rams’ owner Stan Kroenke agreed to purchase the ranch. Listed at $725 million, the ranch is one of the top cattle ranches in the country and is also home to esteemed quarter horses, polo fields, and several lakes. The property rests in the North Central Plains region of Texas.

But it’s not just a scenic cattle ranch. The Waggoner Ranch is major producing oil and gas asset with potential for more exploration.

What are the Oil & Gas Prospects for Waggoner Ranch?
Image source: https://www.bloomberg.com/graphics/2015-famous-texas-waggoner-ranch-for-sale/

Although the sellers wish to preserve the rustic character of the property, there’s plenty of room to develop new oil and gas wells throughout. There are already a reported 1200 oil and gas wells already on the property that have successfully been incorporated into the landscape. In addition to the massive existing production, it’s the opportunity to explore in the future that should have E & P’s closely monitoring the sale. The new buyer will reportedly be receiving 42% of the mineral estate, and the Waggoner family will (very wisely) retain 25% mineral interest in the land.

GEOLOGY

To look at what reservoirs are in play in the area, we did a simple production search in DI Desktop. We limited our search to active oil wells in the six Texas counties Waggoner Ranch covers: Archer, Baylor, Foard, Knox, Wichita, and Wilbarger. We then combined results based on name alone for the eight reported reservoirs with the highest well count (excluding those where the reservoir was not reported).
What are the Oil & Gas Prospects for Waggoner Ranch?

What are the Oil & Gas Prospects for Waggoner Ranch?

Active oil wells in the vicinity of Waggoner Ranch. Colored by reservoir. Red represents all other reservoirs. As seen in the previous table, wells with production from the Cisco (green) and Gunsight (dark gray) reservoirs are most numerous.

What are the Oil & Gas Prospects for Waggoner Ranch?
A look at an oil field in Wilbarger County. Production bubbles are based on daily oil. Grayback is 12.5 miles SSE of Vernon, TX. Grayback is slightly east of Zacaweista Ranch, one of the three subranches W.T. Waggoner established for his children. The well highlighted is a relatively new vertical drill targeting the Coleman Junction formation. Many of the oil wells on the ranch are historical, dating back to the 1930s.
What are the Oil & Gas Prospects for Waggoner Ranch?
Active oil wells with first production after January 1, 2010 colored by drilling trajectory. Twenty-three horizontal wells have been drilled which meet this criteria. Bubble size represents daily oil. The big producer to the north is the Fargo Unit 4102H (API 42-487-33072) operated by Tradition Resources. The reservoir is reported as ‘consolidated’.

What are the Oil & Gas Prospects for Waggoner Ranch?
A historic map of oil and gas fields in the North Texas Area (1951)Source: Petroleum Engineering Study of K.M.A. reservoir, Southwestern Part K.M.A. Oil Field, Wichita and Archer Counties, Tex. Rollie P. Dobbins, Marion L. Ayers, and Roger E. Lewis. Bureau of Mines, Report of Investigation 4892 (June 1952). https://digital.library.unt.edu/ark:/67531/metadc38582/m2/1/high_res_d/metadc38582.pdf

What are the Oil & Gas Prospects for Waggoner Ranch?
A correlation of generalized geologic column and electric log, Wichita and Archer counties, Texas. Source: Petroleum Engineering Study of K.M.A. reservoir, Southwestern Part K.M.A. Oil Field, Wichita and Archer Counties, Tex. Rollie P. Dobbins, Marion L. Ayers, and Roger E. Lewis. Bureau of Mines, Report of Investigation 4892 (June 1952). https://digital.library.unt.edu/ark:/67531/metadc38582/m2/1/high_res_d/metadc38582.pdf
What are the Oil & Gas Prospects for Waggoner Ranch?
Wells in the Cisco formation target Late Pennsylvanian fluvial and deltaic deposits. The geology is defined by the Electra Arch (center) and the Red River Arch (above), which runs east west across the northern border of Wilbarger, Wichita, and Clay Counties. “Electra” refers to the city of Electra, which is named after W. T. Waggoner’s well-known daughter. Source: https://www.waggonerranch.com

What are the Oil & Gas Prospects for Waggoner Ranch?
A north – south geologic cross section. Both sandy beaches and deltaic deposits are present. The Electra Arch complex is a carbonate platform. Source: https://www.waggonerranch.com

OPERATIONS

Using DI Desktop, we performed a production search and then grouped by operator to see what companies were active around Waggoner ranch. Layline Energy was the top, with 1095 active oil wells. Layline focuses on acquiring and improving mature onshore oil fields (Bloomberg). None of the majors had active oil wells in the six counties.

What are the Oil & Gas Prospects for Waggoner Ranch?
Oil production statistics for the 10 most active operators in the six counties touching Waggoner Ranch (based on active oil well count)
What are the Oil & Gas Prospects for Waggoner Ranch?
Pipeline connectivity surrounding Waggoner Ranch. Nustar, Plains, Phillips 66, and Enterprise pipelines convey the crude. Lantana Midstream and Atmos carry the natural gas. The most connections are present around the dense oil wells in Wichita County, but the ranch only covers the western edge there

RESERVES

What are the Oil & Gas Prospects for Waggoner Ranch?
Historical production from the Cisco reservoir, including both active and historical oil wells across Archer, Baylor, Foard, Knox, Wichita, and Wilbarger Counties. Total production peaked around 1965, with the well count beginning to decrease around 1990

What are the Oil & Gas Prospects for Waggoner Ranch?
A type curve for Cisco producing oil wells. Year 00 is the first year of production. Water production closely mirrors oil production. A steeper decline is observed for years 00-19. After about year 43, year over year production levels out somewhat

SUMMARY

The sale of the Waggoner ranch is something to keep a keen eye on. The new land owner might be eager to further expand the scope of oil and gas activity on their new property. With some 510,000+ acres in Texas, operators should have a game plan ready to move fast and get the best acreage the new owner may be willing to lease. Despite the maturity of the area, new vertical wells are being drilled all the time and providing solid production.

Other references:
https://faculty.tarleton.edu/murry/Field%20Geology/4.%20Introduction%20to%20Field%20Techniques/Maps/Abilene%20Sheet%20Explanation.pdf

https://www.bloomberg.com/apps/news?pid=newsarchive&sid=aYcV2V9UBF6k

Special Thanks to Ashley Justinic.

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Eric Roach

Eric Roach is the editor of Drillinginfo's blog, which was selected as the Top Oil & Gas Industry Blog based on visibility, engagement and relevance. He also prepares a weekly newsletter of top industry news for blog subscribers, and would be grateful if you would subscribe and tell your friends. (There's a box on the upper right of the page where you can subscribe).