Here’s the SCOOP:

Oklahoma Plays Offer Untapped Potential

American Association of Petroleum Geologists (AAPG)
Rick Andrews
Rick Andrews

Sometimes people in the industry say an unconventional resource play has become “unlocked.”

The term indicates that a resource play is well enough understood to be developed economically and effectively with continual drilling.

In that sense, the emerging SCOOP and STACK plays in Oklahoma haven’t yet been completely unlocked.

SCOOP stands for South-Central Oklahoma Oil Province. This relatively new play targets the Woodford shale across parts of a seven-county area south and southwest of Oklahoma City.

To AAPG member Rick Andrews, geologist for the Oklahoma Geological Survey (OGS) in Norman, SCOOP is basically an extension of the Woodford Cana play in Oklahoma’s Canadian County, extending southward on the edge of the Anadarko Basin.

“The Woodford is over 10,000 feet deep in this area, and it deepens as it goes into the basin,” Andrews said.

Like the Eagle Ford, the Woodford SCOOP includes areas prospective for oil production, for wet gas and for dry gas, generally changing east to west across the play.

Operators to date have focused on developing liquids-rich gas production.

“It has a thermal maturation that’s conducive to natural gas liquids, NGLs,” Andrews said. “It’s in a corridor several miles wide where the gas has a high heating value.”

So far, the STACK play includes limited drilling in Canadian and Kingfisher counties, to the west and northwest of Oklahoma City.

Newfield Exploration Co. in The Woodlands, Texas, announced the STACK play last November.

It sees the play as a combination of prospects in the Woodford shale plus shale zones in the younger Mississippian Meramec.

“The Meramec is a relatively thick sequence of limestone and interbedded shales,” Andrews noted. “Historically, it’s part of the Sooner Trend.

“The problem is, as you go north, northeast, the Woodford thins dramatically,” he said. “The STACK is in an area where the Woodford is thinning and they’re picking up other horizons.”

Old Trends, New Interest

Beginning in the 1950s, the Mississippian Sooner Trend became a hotspot for Oklahoma exploration. Eventually it included more than 100 named fields, according to the OGS.

In western Garvin and McClain counties, especially, the SCOOP play encompasses another famous Oklahoma oil trend, the Golden Trend. Not officially named until 1947, the trend also produced a number of important oil discoveries.

Consequently, current geological understanding of these areas has roots in the 1940s and 1950s.

Andrews said the play-area Woodford is “a restricted marine depositional setting where it’s very anoxic. Because it was a reducing environment over millions and millions of years, a lot of organic material built up.

“As you jump up a level to the Mississippian, which overlies the Woodford, you get into a completely different geological deposition,” he added. “Most of the rocks are carbonates. They’re definitely more shallow marine.”

With horizontal drilling and hydraulic fracturing, these old trend regions are attracting new interest, this time around as liquids-prone and oil-prospective, unconventional shale plays.

“It’s just a new area in that they’re applying horizontal drilling technology,” Andrews said. “They’re opening up a lot more rocks than what vertical wells did, that’s for certain.”

Thick as a Brick

Newfield Exploration identified the STACK play and is a significant participant in the SCOOP play. The company has more than 150,000 acres in the STACK and about 75,000 acres in the SCOOP.

In announcing capital expenditure plans, Newfield said it intends to spend $700 million and operate eight rigs in Anadarko Basin plays in 2014, by far its biggest presence in any of the company’s four main operating areas.

Steve Campbell, Newfield vice president of investor relations, said the company entered the Woodford shale as a dry gas driller. That experience provided the company a good understanding of the formation, he noted.

“We started in the dry gas portion of the Woodford in 2003. That’s in an adjacent basin to the east, the Arkoma Basin,” he said.

As gas prices declined steeply, Newfield looked for more lucrative prospects. It extended drilling to the west and “got oilier wells” in Stephens, Garvin and McClain counties.

“We were seeing enhanced economics from the liquids cut. We went on a tear and accumulated about 75,000 acres,” he said.

Evaluation of the Woodford and Meramec led Newfield north into the STACK play area.

Last year, it acquired interests in about 76,000 net undeveloped acres in Kingfisher and Canadian counties from Gastar Exploration USA.

Newfield reported it drilled eight producing STACK wells as operator in 2013, with an average 90-day production rate of 597 barrels of oil equivalent (boe) per day, 74 percent oil.

Campbell said one secret of success in the main STACK play area is the thickness of the Meramec, which the company interprets as a shale.

Where the Woodford thins to 200 feet or less, the Meramec can reach 475 feet of thickness, and Newfield has obtained core through a 400-foot saturated interval, according to Campbell.

“Because of the thickness, we think we can place wells at different intervals in that play,” he said.

Above the Meramec is the Chester shale, a regional topseal that “acts as a natural frac barrier so your fracs don’t propagate upward,” Campbell noted.

Going Deeper

In the SCOOP play, Newfield divides development operations into a wet gas area and a more oil-prone area. Last year its wet-gas SCOOP wells had an average 90-day production rate of 1,430 boe per day – 24 percent oil but rich in gas liquids.

Keys in this area are liquids content, over-pressured zones and high production rates, Campbell said. Some of the company’s SCOOP wet-gas wells IP’ed at over 2,100 boe per day.

So far, SCOOP has been an NGLs story for operators economically, although oil chances exist.

In 2013 results, Newfield had 90-day average production rate of 1,112 boe per day, 52 percent oil, from seven SCOOP oil producers.

In the main SCOOP play area, the Woodford shale can be 225 to 400 feet thick, siliceous, highly fractured and high in organic content, with porosities of 3 to 10 percent.

While the Woodford can be found at 8,500-10,000 feet in the STACK play, some SCOOP wells target the shale at almost 16,000 feet depth. Andrews and Campbell agree that depth and thermal maturity are important considerations.

“That’s why these plays are located where they are,” Andrews said. “If they go too shallow it gets out of the thermal maturation window. If you go too deep, you get dry gas.”

Location, Location, Location

In November, Gary Packer, Newfield chief operating officer, said initial STACK wells were providing about 35 percent rates of return.

“We are early in our learning curve in the STACK and history proves that we can lower costs and enhance returns as we move to development mode,” he said.

It’s still too soon to call the SCOOP and STACK fully unlocked resource plays. In these emerging plays, operators will “have to do some drilling to establish the viability of production,” Andrews observed.

Campbell did identify one additional edge in favor of the SCOOP and STACK, and it echoes the old real estate adage about property desirability:

Location, location, location.

“The fact that these plays are in Oklahoma,” he said, noting that the state offers established procedures, favorable laws and extensive infrastructure, “is a distinct advantage.”

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