In the midst of 1,000-plus-barrel Woodford- and Meramec-well IPs in Oklahoma’s Scoop and Stack plays, Springer-shale potential is continuing to fascinate producers, according to presenters during Hart Energy’s DUG Midcontinent conference.

Newfield Exploration Co.’s Jarred 1-16H in Springer IP'd 1,950 barrels of oil equivalent (boe) and had a 30-day average of 1,220 a day, 81% oil. Pat McCelvey, Newfield general manager, Midcontinent, said the company’s Scoop, in which Springer is tucked, and its Stack are economic for Newfield at current oil prices, particularly “with the willingness of our contractors to work with us lately” on cost. “There would be a lot fewer rigs running right now without that willingness to work together.”

Oppenheimer & Co. Inc. analyst Robert Du Boff wrote this past week that Newfield expects its Scoop wells to cost between $7.6- and $8.9 million now, down from between $9- and $13 million. Jefferies LLC analyst Jon Wolff noted, in his report on Newfield’s 2015 production guidance, that its Scoop and Stack targets are “its highest-return asset.” Newfield, which also operates in the Williston, Uinta and Arkoma basins, plans to spend 70% of its $1.2-billion 2015 capex budget on Scoop and Stack.

As for Springer in particular, Newfield’s McCelvey told conference attendees, “We see it as a great addition to the Scoop play…We’re excited about that.”

Brandon Mikael, a U.S. Lower 48 upstream analyst for Wood McKenzie, told attendees that, within Scoop to date, “your best Springer wells are not in the same place as your best Woodford wells.” Also, while “this is some of the best rock to drill in the Lower 48,” the areal extent is within a window smaller than the overall Scoop-Woodford window. “It has limited running room.” Even the core of the Scoop play itself “has world-class rocks but just not much of them,” he said.

However, WoodMac reported earlier in February, based on Mikael’s findings, that Scoop-Springer economics break even at $41 WTI; Scoop-Woodford, $47; Bakken (Sanish and Parshall fields), $45; and Eagle Ford (Karnes Trough), $48.

“[Scoop is] still one of the most exciting growth areas in the Lower 48 because of the stacked-pay potential,” Mikael said at DUG Midcontinent. He expects the Anadarko Basin’s Scoop, Stack and Cana-Woodford production to exceed 1 million boe a day by 2020, with about a fourth of that being oil and condensate. The estimate includes factoring for 60 rigs drilling these this year, down from 92 in 2014.

Marathon Oil Corp. collaborated with WoodMac on the Anadarko Basin study, Wade Hutchings, Marathon regional vice president, Midcontinent assets, told attendees. “We will find more ways to make those wells cheaper and cheaper,” he said. “I think we will find more and more of the Scoop and Stack plays viable.”

Is Springer a source-rock reservoir like Woodford? Hutchings said, “We’re early in understanding how this petroleum system has evolved over time.”

Marathon reported in mid-February that its North American spend in 2015 will be $2.4 billion in the Bakken, Eagle Ford and Oklahoma. Of that, $226 million is planned for Oklahoma with two rigs. It is adding 10,000 net acres to its Scoop position, including acreage in the Springer window.

A DUG Midcontinent attendee asked Mikael whether there is any way to enter the Scoop play at this time. He said, “It comes down to how much money you’re willing to spend. There are small private-equity-backed companies that are active [in the area]. Organically, it’s hard to [enter] but, at these [oil] prices, that’s something you don’t want to do right now.”

Privately held Sheridan Production Co. LLC drills and produces from conventional reservoirs in the Midcontinent and has found its leasehold in the midst of the Scoop play. It owns rights to Springer in some 35% to 40% of its 350,000 net acres in the Midcontinent, said Jim Bass, president and CEO.

It has already sold Woodford rights in some 25,000 net acres in the Scoop area to three operators “to facilitate exploration in that reservoir,” he said. Due to the acquire-and-exploit, rather than exploration, nature of Sheridan’s business model, “it’s something in which we would not play.”

It has also sold Springer rights in about 7,000 net acres to further facilitate exploration. The amount is smaller than its deals for Woodford rights “because it suited the buyer’s needs and it left us with our own unconventional exposure,” he said.

The play may come to Sheridan. “Whether you consider it Goddard or Boatwright [shale members of the Springer group], it is a known reservoir. It may still be new in its life of development…but as activity continues and years pass and we develop our current conventional opportunities, there will be more known … and we will leave our options open and see if there is an opportunity to drill some of this stuff at some time going forward.”

He added, “I stand here and marvel at what this basin continues to offer as it reinvents itself.”

Newfield chairman, president and CEO Lee Boothby said in an earnings call this past week that “there is attractive acreage out there and there are people that control acreage that we view as attractive. [If] the market conditions and the timing are right, we’d like to add them to the portfolio.” (Source: Transcript, Thomson Reuters StreetEvents.)

Newfield reported before the call that its Scoop and Stack proved reserves are now 30% of its total, 181-million-boe portfolio while, at 295,000 net acres, it is 23% of its leasehold. The company’s 10-operated-rig program in Scoop and Stack, where its 2014 production doubled from 2013, is expected to produce up to 100 wells this year.

Boothby noted in the call that Newfield and Continental Resources Inc. are in a number of each other’s wells in Springer, which is demonstrating itself to be a “really high-quality target. Hydrocarbon-rich. Good permeability. All the things you like to see.”

He added that these robust wells are just one-section laterals. “So we…will be testing both 5,000- and 10,000-foot laterals. We see [Springer] as a strong, economic target,” he concluded.

Continental began testing Springer in its Scoop position in 2012 and reported the discovery and two confirmation wells this past September. The three wells had made a combined 640,000 boe by then. IPs of those and 12 subsequent wells averaged 1,230 boe, 67% oil and 17% NGL. (For additional details on Springer, see Oil and Gas Investor’s January cover story, “Emerging Plays, 2015.”)

This past week, the company reported it plans three to six rigs drilling Springer this year. It added 16 net Springer wells in 2014, growing production to 5,905 boe a day. IPs averaged 950 BOE in the fourth quarter. Schoof 1-17H IP'd 1,465 boe and had a 30-day average of 920 a day; Lyle Land 1-25H, 1,135 and a 30-day 908 a day; and Martha Skid 1-35H, 935 and a 30-day 648 a day.

Laterals are some 4,500 feet in each. All three are in Grady County. Oil production from each well is roughly 75% of the commodity mix.

In a recent density test in its Hartley area, four wells IPed an average of 1,186 boe from roughly 4,600-foot laterals. Three of the wells are about 1,050 feet apart; one is about 2,100 feet from the others. Half of its 2015 Springers will have laterals of more than 5,000 feet in extended-lateral tests, it added.

Robert W. Baird & Co. Inc. equity analyst Dan Katzenberg wrote, upon Continental’s earnings call, that its results and down-spacing demonstrations in Scoop and Springer are “outperforming our modeled type curves.”

Canaccord Genuity Inc. analyst Stephen Berman wrote that the Scoop play, including Woodford and Springer, produces a roughly 35% IRR at $55 oil. “We continue to believe that the Scoop is under-appreciated by the Street given its robust economics …,” he concluded.

Nissa Darbonne is the author of The American Shales. Contact her at ndarbonne@hartenergy.com.