Listen over the next six months for these names: Springer Shale, Meramec, Hunton Limestone, southern Mississippi Lime and the Stack. Some are simply different names for the same geologic target. But all are emerging plays and all are found in western Oklahoma, mostly within the Anadarko Basin.
This has led to delineation of a new province in oil and gas, the Oklahoma Resource Plays. The name is a nice wide loop—to borrow cowboy parlance—to encompass an emerging multi-stratigraphic set of opportunities.
The new province is located west and southwest of Oklahoma City and presents a buffet of stacked targets for operators, making the region the next in line to contribute to the rapidly evolving tight formation renaissance that has revitalized liquids production in the U.S.
Over the next decade, the U.S. market will evolve from single-name shale plays, such as the Bakken, or Eagle Ford, toward multiple stratigraphic resource targets, as is occurring currently in the Permian Basin, the Niobrara and the Appalachian Basin.
The southern portion of the Oklahoma play has produced 3.2 billion barrels (Bbbl) of oil from more than 60 reservoirs over the last century. What this means is that the region already has sufficient infrastructure in place to transport and process production, and that will shorten the developmental cycle.
Currently there are roughly 70 rigs in the play. While most unconventional plays, with the exception of the Permian, have been flat in terms of activity, rig count has been rising over the last year in western Oklahoma.
There will be some initial challenges, particularly in a lower commodity price environment. This is, after all, the land of $12 to $14 million wells as operators delineate and optimize both source rock potential and overlying stratigraphic targets. The breakthrough recently has involved enhanced completions, which have been applied successfully to the gassier Cana Woodford to the north and are now being deployed in the southern Anadarko Basin.
Operators are pushing laterals out to 10,000 feet, adding more stages, more perforations and more proppant. Operators are also reducing spacing between wells to explore optimum density as part of the optimization phase of the tight formation development cycle and completing wells in both the upper and lower Woodford.
Extended laterals can add more than 40% to well costs, but provide a 70% uplift to revenue via greater production. Some wells now exceed 2,000 boe on 30-day IP.
Secondly, operators are delineating the full spectrum of the stacked play, usually through multiple wells on single pads targeting different portions of the geologic column. There are seven potential targets, ranging from the Hunton Lime on the lower stratigraphic column up through the Penn sands. The Woodford Shale is the thickest and most important of these. Historically, the Woodford Shale has been the Oklahoma resource that keeps on giving. However, the oily Springer Shale is the most recent target.
Operator delineation efforts involve multiple forays into the southern Missisippian Lime extension, sometimes called the Meramec, Caney or branded as the Stack in Kingfisher and surrounding counties to the north. The Oklahoma play resembles the Eagle Ford or Utica in that hydrocarbons undergo a phase change as they move updip from dry gas to the north and west, through condensate and into crude oil.
Main players include Continental Resources Inc., which revitalized the region’s potential roughly two years ago and branded the region as the Scoop or South Central Oklahoma Oil Province. Continental has 471,000 net acres and is growing its position through multiple small acquisitions. Marathon Oil Corp. has 300,000 net acres in the region and is increasing its rig count, while Newfield Exploration has 85,000 net acres in the Scoop and another 165,000 acres prospective for the Stack. Gastar Exploration Inc. has been working the Hunton Lime.
Exploration efforts are moving south into Stephens County with optimization underway in the northern part of the play. Early results indicate the play has running room, with several wells exhibiting slower decline profiles than found in mature name plays.
This circumstance provides the Oklahoma Resource Plays with economics similar to other high-quality tight formation plays, despite higher well costs.
With new technological tools and seven potential underground targets—and with hope for improved commodity prices—the sky might be the limit for oil and gas operators in western Oklahoma.
Recommended Reading
CEO: Coterra ‘Deeply Curious’ on M&A Amid E&P Consolidation Wave
2024-02-26 - Coterra Energy has yet to get in on the large-scale M&A wave sweeping across the Lower 48—but CEO Tom Jorden said Coterra is keeping an eye on acquisition opportunities.
Weatherford M&A Efforts Focused on Integration, Not Scale
2024-04-25 - Services company Weatherford International executives are focused on making deals that, regardless of size or scale, can be integrated into the business, President and CEO Girish Saligram said.
SilverBow Rejects Kimmeridge’s Latest Offer, ‘Sets the Record Straight’
2024-03-28 - In a letter to SilverBow shareholders, the E&P said Kimmeridge’s offer “substantially undervalues SilverBow” and that Kimmeridge’s own South Texas gas asset values are “overstated.”
Exxon Mobil, Chevron See Profits Fall in 1Q Earnings
2024-04-26 - Chevron and Exxon Mobil are feeling the pinch of weak energy prices, particularly natural gas, and fuels margins that have cooled in the last year.
Buffett: ‘No Interest’ in Occidental Takeover, Praises 'Hallelujah!' Shale
2024-02-27 - Berkshire Hathaway’s Warren Buffett added that the U.S. electric power situation is “ominous.”