Data limited in STACK play, but early well performance comparable with Eagle Ford shale (economic at below $45 per barrel)
At current low oil prices, few U.S. oil and gas plays are economical. However, the emerging Oklahoma STACK play is bucking the trend by showing economic promise at oil prices below $45 per barrel (WTI) and for that reason, is garnering attention from operators, service companies and investors, according to new analysis from IHS.According to IHS Energy research, the productivity (per 1,000 lateral feet) in the Oklahoma play is nearly on par with the prolific Eagle Ford play in south Texas.
During the past 12 months, the Oklahoma play has, at times, delivered 100 BOE (more than 450 BOE per day peak-month rate), and at or near Bakken formation levels of 60 BOE per day in most months (nearly 275 BOE per day peak-month rate).
“This is good news for operators in this low-price environment. However, we are very early in terms of development in this play, and the limited drilling to date has not yet revealed a sweet spot for the Oklahoma STACK. What has to be determined is the volume potential for the play and the extent of the play in terms of viable horizons and acreage. That’s going to take more time and much more drilling, and that means a lot more investment,” said Reed Olmstead.
Operators have identified as many as 10 reservoir targets in the play, which covers approximately 2.4 million acres, IHS said. In its current analysis, IHS included the various Mississippian geologic formations, as well as the Hunton and Oswego reported formations in the Kingfisher, Canadian, Dewey and Blaine Counties in Okla.
Main operators in the play include Devon (and its recent acquisition, Felix Energy), Newfield Energy, Husky Ventures, Cimarex Energy and Chaparral Energy. The standout thus far is Husky Ventures, with results delivering a sub-$40 per barrel break-even return.
Good and poor-performing wells are scattered across the STACK play fairway, IHS said, although the most favorable trend established to date is in the Northwest to Southeast fairway in Northeast Kingfisher County, Okla. A number of first- and second-quintile wells exist in the Hunton, Owego and Mississippi Lime reservoirs, the IHS report noted.
However, with no sweet spot identified and limited drilling history in the Oklahoma STACK play, IHS said operators remain undecided on the ideal development approach. Lateral lengths in the play range from 4,500 feet to more than 10,000 feet, while proppant intensity also varies widely among operators.