- Clear Fork Royalty
Interest Surging in Oklahoma's STACK and SCOOP Plays
Updated: Apr 12, 2019
Some of the most resource-rich shale reservoirs in the country are in Oklahoma, particularly in the south-central region. McKinsey Energy Insights says, "With breakevens ranging from USD 29-43/bbl, Oklahoma's SCOOP/STACK shale plays are living up to their reputation as the U.S.'s hottest new area for horizontal development."
Oklahoma's storied oil and gas production dates back to the late 1800s. In 1897, the Nellie Johnstone No. 1 well became the first commercially viable one, 10 years before statehood. The well, drilled near Bartlesville, produced oil until 1964. Over the last decade, development of oil and gas shale has injected new life into the Oklahoma energy industry.
Growth in Oklahoma Oil and Gas
According to the Energy Information Administration (EIA), Oklahoma now ranks third nationally in natural gas production and fifth in oil production. The EIA calculates that the state accounts for 7.6 percent of U.S. natural gas production.
According to the EIA's Drilling Productivity Report, oil production in the Anadarko Basin increased to 487,000 barrels per day in January 2018, ranking it fifth in the country behind the Permian, Bakken, Eagle Ford, Appalachia (Marcellus and Utica) and Niobrara areas. Anadarko also accounted for 6.055 billion cubic feet of natural gas per day.
As 2018 arrived, the price of West Texas Intermediate (WTI) crude hovered around $60/bbl, an increase of almost 25 percent since the end of August. With oil from SCOOP and STACK typically profitable at significantly less than that, rebounding prices bode well for new exploration and development across the region.
The SCOOP Play
Ask "What's the Scoop?" in Oklahoma, and industry insiders speak of significant oil reserves. Many consider the South Central Oklahoma Oil Province (SCOOP) the epicenter of the state's oil opportunities, in part because it includes three of the largest oil-producing counties. The SCOOP play includes 60 reservoirs that have already produced 3.2 billion barrels of oil. The 225-350 foot thick shale is found at depths ranging from 6,000 to 16,000 feet. Porosity is good, ranging from 3 percent to as high as 10 percent.
McKinsey credits "more effective completion designs and core area development" for a greater than 70-percent increase in initial production rates, competitive with those in the Eagle Ford and Permian plays.
The Anadarko Basin offers deep sediments more than 40,000 feet deep. Scattered across these sediments are different-depth targets that offer more opportunity per pad. Wells less than 7,000 feet deep often target the Oswego formation, while drilling down to 7,000-8,500 feet targets Meramec shale. West of Kingfisher County, deeper wells running to depths of 10,000 feet and more primarily yield natural gas.
The STACK Play
The acronym "STACK" references an oil field (Sooner Trend), basin (Anadarko) and counties (Canadian, Kingfisher). Unlike SCOOP, STACK refers to a geographic area rather than a shale formation. The play also encompasses Garfield, Major and Blaine counties). Meramec shale in the region is approximately 275-475 feet thick with 3-6 percent porosity, while Woodford shale is 75-300 feet thick with 3-7 percent porosity.
McKinsey reports that STACK wells often have a water-to-oil ratio of less than three. Limited water formation is a plus, as it reduces or eliminates water disposal issues. Also, the STACK play offers companies a lower cost of entry and better access to acreage than the Permian play. It also offers more drilling targets than most other formations. In recent years, horizontal drilling has vastly improved production, sometimes as much as 50 times that of vertical drilling.
The report, "IHS Markit Plays and Basins: Oklahoma STACK" states that STACK attracted approximately $2.5 billion in investment in 2017. The report notes four Meramec wells that came online in mid-2017 that accounted for an average initial 30-day production rate of 2,000 barrels of oil equivalent (BOE). One record-setting Kingfisher County well hit a peak rate of 6,000 BOE. The well is expected to produce more than 2 million BOE during its lifespan.
Increased crude oil prices and enhanced oil and gas extraction methods combine to improve the prospects for both SCOOP and STACK. This frequently translates into improved asset values for those with mineral rights in these areas. Oklahoma's SCOOP and STACK plays offer those with mineral rights the opportunity to turn them into cash. Enjoy the peace of mind and increased liquidity that comes from selling your mineral rights and/or royalties.
Offers for Mineral Rights and Royalties
If you have such assets that you'd like to convert into lump-sum cash payments, look to Clear Fork Royalty for a no-obligation assessment. Relieve yourself of concerns about ongoing expenses and future market fluctuations.
Clear Fork Royalty also works with those currently receiving royalties. Our proprietary system for acquiring royalties is fast and accurate. In many instances, we calculate values and make offers in a matter of hours or days. Please contact us today to arrange for a professional evaluation of your holdings.
Clear Fork Royalty is currently interested in SCOOP and STACK shale royalties in every county in the area, including Canadian County, Kingfisher County, Garfield County, Major County Blaine County, McGrady County, Stephens County, Caddo County, Garvin County, Murray County, Love County and Carter County.