OKLAHOMA CITY—No one should expect to get something for nothing, but that doesn’t mean you can’t make something from nothing. After all, Rumpelstiltskin spun gold riches from straw, right?

Producers in the Anadarko Basin aren’t able to magically spin out gold coins, of course, but many have found a way to turn the Stack into one of the top shale plays in the world, particularly during this shale renaissance. Newfield Exploration Co. (NYSE: NFX), founder of the Stack play, has led the charge in moving from concept in the region to full-field development.

Trevor Reuben, vice president of corporate development at Newfield, told the audience at Hart Energy’s recent DUG Midcontinent Conference and Exhibition that the last decade has seen his company truly transform from a diverse offshore entity to a U.S. onshore resource player focused on the Anadarko. Two-thirds of its production and reserves and 80% of its capital are focused in the basin.

“In the Meramec and Woodford alone we see 2.5 billion barrel of oil equivalent gross unrisked resource, which will provide us with decades of economic drilling locations for the future,” he said during the second day opening keynote address. “[The Anadarko] really has gone from nothing to something spectacular.”

Reuben said Newfield is “upwards of 90,000 barrels of equivalent production and 330 million barrels for reserves.” In 2016, Newfield was the top oil producer in Oklahoma.

For the audience at DUG Midcontinent, it was a rare glimpse into how Newfield came to discover the Stack. The company actually started in the Arkoma to the east, which was where it made its first onshore U.S. resource play. From there, it moved to drilling the Blevins 3H-9, a horizontal Woodford gas discovery.

“Soon we were on to focusing on the liquids window in the Arkoma,” he said.

However, the company ended up making its first horizontal oil discovery in the Woodford in 2009. But it wasn’t until 2012 when, using geological mapping and an engineering study, Newfield struck oil in the first Woodford/Stack horizontal oil well, the Rock Island 1H-14.

“It was successful. We took a core on that well, and we used that to accelerate our next assessment,” he said.

Less than a year later, Newfield drilled the first Stack/Meramec horizontal oil well, State 1H-16.

“Today, we’ve grown our position from 100,000 net acres to over 350,000,” Reuben said. “We’re really excited about the Anadarko because we consider it absolutely world-class.”

“It’s one of the largest and deepest onshore U.S. basins, with significant total organic content, low clay content, excellent seals and, as everyone knows, there have been literally thousands of wells drilled into it, all validating the potential,” he continued.

Only The Beginning

Like others speakers at DUG Midcontinent, Reuben pointed out that the industry has only begun to the scratch the surface in the Anadarko. He said there are more than 10 productive horizons in the basin.

Reuben also said the economics of the play “really are top tier.” Even at around $50 per barrel, the Stack and Scoop are competitive, he said. “They are going to be a focus of industry attention for a long time to come.”

He cited low lease operating expenses and finding and development costs “because of the prolific nature of these wells relative to the capital cost required for investment.” In addition, water/oil ratios remain one-to-one, which is significantly less than other basins that are getting attention at the moment.

“The superior economics of these plays just speaks to the fact that why we’ve seen a tremendous amount of activity sustained through cycle,” he said.

Price Cycles

Coinciding with the evolution of the Stack and Scoop there have been two very distinct price cycles.

From 2011 to 2014, which was more in the assessment phase, there was unprecedented price stability. “That supported continued investment,” Reuben said, referring to the price correction in mid-2014, “which led to the ultimate ramp up which would seem like at an inopportune time.”

But while volatility increased 3x at that time, so too, did activity and production in the Scoop and Stack, he said. The continued investment has led to an expansion of the fairways over the last couple of years.

In particular, he pointed to the last year, which saw a flurry of 10 deals approaching $10,000 per acre. “There’s been rapid valuation improvement despite the fact that commodity prices have been fairly weak,” he said.

Most of those deals were by new entrants “because legacy positions were taken by the bigger companies.” Those deals have helped stretch the boundaries of the Stack, something that Reuben said is justified by well results.

Expanding The Play

Reuben said Newfield is focusing a new comprehensive pilot program on the Meramec. “This doesn’t even scratch the surface of what I think the next exciting opportunities are, which are actually going back in the Woodford and doing higher density tests, as well as in the Osage and down in Scoop,” he said.

“What we’re trying to do is unlock the Rubik’s Cube and understand vertical and horizontal spacing as well as what the optimal completion design is,” he continued. “We’re using all kinds of science to maximize value out of a section so that we don’t find ourselves in five or 10 years having missed a tremendous amount of resource.”

Reuben closed out his address by discussing Newfield’s SCORE program, which is the Sycamore, Caney, Osage resource expansion. “We out there hunting right now for the next Stack,” he said. “There’s tremendous opportunity right under our old footprint.”

The company plans to spend about a $100 million this year to test the potential. “We think we’re assessing over a billion barrels of equivalent of resource potential,” he said.

Reuben revealed the early results have been encouraging and the company expects to have about 10 wells online by the end of the year. Some will drift into 2018, he said.

Len Vermillion can be reached at lvermillion@hartenergy.com or @LenVermillion.