S&P Global Platts, Houston — Continental Resources projects its latest showcased oil play, known as Project SpringBoard and sited in Oklahoma, alone will provide 10% oil growth for the company between Q3 2018 and Q3 2019, its top executives said Tuesday.
Springboard, a term to denote three prolific reservoirs in the South Central Oklahoma Oil Play, or SCOOP, is forecast to deliver 16,500 b/d of oil in that 12-month period although Continental President Jack Stark believes that is far from SpringBoard’s maximum potential.
The current 22 wells currently producing from the Springer formation are currently flowing 15,500 boe/d gross, but represent a thinner section and therefore less prolific part of the reservoir drilled last year, Stark said during a conference call unveiling early SpringBoard results.
“We look forward to turning on more production from the formation” in addition to wells drilled in a thicker part of the Springer section, he said.
Project SpringBoard is a “massive” multiyear project that covers 73 square miles with as much as 400 million barrels of oil gross equivalent potential. It is located in the north-central SCOOP in Grady County, and besides the Springer formation also includes two others, the Sycamore and Woodford.
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Springer is the shallowest formation and Woodford, the deepest. All are prolific reservoirs yielding 70%-80% oil.
Early results from the play have prompted Continental to raise its average ultimate per-well recovery rate to 1.3 million boe from an earlier 1.2 million boe, and increase the lateral (horizontal leg) length to 9,800 feet to 7,500 feet.
Continental has seven rigs drilling in the Springer and five rigs drilling in the Sycamore and Woodford. A total of 33 wells are awaiting completion, including 16 Springer and 17 Woodford and Sycamore wells.
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“We have other potential large scale developments under consideration, with SpringBoard II in our sights,” Stark said.
Continental unveiled the SCOOP play in 2012, although it is often paired with the even more prolific STACK play to the north as the two largest developments in the state.
Economics generate 60% to 90% return rates, based on $50/b to $60/b oil prices, representing “one of the strongest return rate oil plays in the US,” said Gary Gould, senior vice-president, production and resource development.
In addition, Continental’s Springer oil differentials to WTI are the lowest in the Oklahoma City-based company’s portfolio – below $2/b from nearness to markets and oil quality, Pat Bent, senior vice-president of drilling, said.
“Our midstream provider’s oil pipeline goes right through Springboard with an oil terminal in the center of the project,” Bent said.
The pipeline, which he did not immediately name, connects to a refinery 50 miles away with the option to go to the Cushing oil hub 100 miles away, he said.
Continental also has a large Bakken Shale operation in North Dakota.
In addition, natural gas production from Springboard has direct access to premium markets in North Texas through the Wildcat pipeline, where Continental has secured 400,000 Mcf/d of firm transportation.
Analysts on the call said they were concerned about SpringBoard’s productivity per lateral foot, which they said had declined from earlier expectations. Stark said the project will save $125 million in projected net capital expenditures, and that would more than cover the gap.
The issue stems from early-time water recovery associated with unit development, Stark said. The issue is one of timing since for most of a project’s life, newer wells have higher production than old ones and over time those costs are netted out.
“You have to think about this as a total project,” he said.
S&P Global Platts— Starr Spencer, starr.spencer@spglobal.com
S&P Global Platts— Edited by Richard Rubin, newsdesk@spglobal.com
