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Scoop & stack Play
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SCOOP
The SCOOP play otherwise called the South Central Oklahoma Oil Province play includes mineral rights located within the state’s Anadarko Basin. The SCOOP play extends its reach throughout the crude oil and gas heavy counties of Garvin, Grady, Stephens, Murray, and Carter counties.
The SCOOP play targets Devonian to Mississippian-aged Woodford Shale. The Woodford Shale is a silica and highly organic-rich black shale that was deposited about 320 million to 370 million years ago.
The Woodford shale is seen as the major source rock for certain plays in the basin as it provides hydrocarbons to the Hunton group, Viola group, Simpson group, and the Arbuckle group. Similar to other unconventional oil and gas plays, this source rock formation is now the target of horizontal drilling activity as well as the target for mineral rights leases or purchase offers as of late.
Mineral rights owners with royalty interests or mineral rights within the SCOOP play may encounter one of the following operators as they begin to contact owners to negotiate an oil or gas lease.
In order for these operators to begin crude oil production or drill for natural gas production, they must first make an offer for a lease. This offer typically includes a lump sum upfront paired with a specific royalty percentage which explains what oil and gas royalties percentage will be paid if any wells are completed during the lease term.
STACK
The STACK play includes mineral rights located within the Anadarko Basin area of Oklahoma. STACK is derived from “Sooner Trend (oil field), Anadarko (basin), Canadian and Kingfisher (counties).”
The majority of the play is located across (Canadian and Kingfisher as the core counties) and Blaine, Major, and Garfield counties. Unlike Plays such as the Eagle Ford, Bakken, and Granite Wash, the STACK is not a geological formation, but a geographic referenced area.
The play, which is northwest of Oklahoma City, targets the Woodford as well as Mississippian-age shales. The STACK is aptly named as there are multiple stacked formations that are being targeted for oil production and gas production.
The Sooner Trend Field has produced nearly 500 million barrels of oil since its discovery in 1945. Newfield pioneered the dry-gas Woodford-shale play in 2003 in the western Arkoma Basin (while natural gas prices were above $6 per unit and oil prices were below $35 per barrel), east of its current, liquids-rich Woodford play in the Anadarko Basin.
It has more than 170,000 net mineral acres prospective for Woodford in its Stack play and more than 150,000 net prospective for the overlying Meramec. It also has some 75,000 net acres in the Scoop play.
MERGE
The Merge and its mineral rights lay between the prolific STACK (Sooner Trend, Anadarko, and Canadian and Kingfisher [counties]) and SCOOP (South Central Oklahoma Oil Province) plays, effectively tying them together.
Privately funded Citizen Energy, formed in 2012, drilled the Merge discovery well in September 2015 and 18 delineation wells before significant competitor interest emerged. The discovery, made by the Governor James B. Edwards well in the Sycamore formation, was Citizen’s first company well.
As in the SCOOP and STACK, the production column of the Merge area contains minerals with multiple stacked targets. “This is a completely charged Mississippian column sitting on top of an actively generating Woodford source rock, a 2,200-foot continuous hydrocarbon charge from Upper Devonian to Middle Mississippian,” Augsburger says.
Citing 11,000-13,000 psi bottom-hole pressures and pressure gradients exceeding 0.8 in Citizen’s RLP No. 2A well (the deepest STACK well drilled so far) and the Anderson Half No. 1-30-19XH well (the deepest well Continental Resources has drilled to date in STACK in a subplay it calls Deep STACK, where the Meramec is encountered at depths of at least 13,000 feet), Augsburger points out that the thickness of the productive column and pressures at depth indicates a large resource in place in the STACK/SCOOP/Merge plays area. “This truly is an enormous resource,” he offers.
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Selling, Leasing, and Creating Value
Mineral rights owners with royalty interests or mineral rights within the STACK play may encounter one of the below listed active operators as they begin to contact owners to negotiate an oil and gas lease. In order for these operators to produce oil or drill for gas production, they must first make an offer for a lease.
This lease offer form typically includes a lump sum upfront paired which is typically set by current oil prices and lease market conditions along with a specific royalty percentage which explains what oil and natural gas royalties percentage the mineral owners will be paid if any wells are completed during the lease term.
Mineral owners in most cases can negotiate the lease bonus, delay rentals, and royalties on their lease in order to achieve what they feel is the best price for them.
In some cases, mineral owners in these basins may decide to sell their Oklahoma minerals before wells are drilled, or before receiving royalties on new wells. Investors interested in working interests, royalties, or minerals will typically contact sellers during drilling and before division orders are issued in order to create the most value for both parties.
Without having the “mineral scoop” like many investors it’s tough for an Oklahoma & Texas mineral owner to know if they should sell or not and what their acreage is worth on the open market. This is precisely why we created www.redriverhub.com as the first safe and secure mineral exchange for owners in Oklahoma and Texas interested in selling to create maximum value. Signing up is free, and there is no obligation for our customers to sell.
Key Oil & Natural Gas Operators in the STACK/SCOOP & MERGE include:
Continental Resources
One of the major players when it comes to developing mineral rights. They have Project Springboard in the SCOOP where they have 73-miles of contiguous leasehold and are using what they call row development to maximize efficiencies for the owners of those minerals. 3 reservoirs are being targeted: Springer, Sycamore, and the Woodford with 70-85% of production being oil. Basically, this is a full-field development scenario for their leases and minerals which are in the sweet spot of the over-pressured oil window of the SCOOP.
Devon Energy
Has one of the largest positions of leased mineral rights in the STACK. They recently announced an agreement with Dow to jointly develop a portion of their minerals. In 2017, Devon held the initial production rate record in the over-pressured oil window of the STACK play. The peak 24-hour rate of production was 6,000 oil-equivalent barrels per day (50% oil). At the time this was the highest initial production rate of any well in the play.
Newfield Exploration
- Approximately 350,000 acres of leased minerals in the Anadarko Basin, much of which is in the STACK and SCOOP play.
Ovintiv (formerly Encana)
Approximately 365,000 acres of leases and minerals with 265 of that in the STACK and the rest in the SCOOP.
Marathon Oil
Approximately 300,000 net surface acres of leased minerals in the STACK/SCOOP.
Citizen Energy
Approximately 140,000 acres of leased minerals in the MERGE. Citizen has been one of the most active operators within the Merge play since 2015.
Rig Count in the Oklahoma Scoop & Stack
Production in the SCOOP-STACK recently hit 2-year highs as crude prices climb out of what had been a record-breaking downturn due to economic tightening surrounding COVID-19.
As of the date of publication, you can see the weekly rig count dashboard from our Industry Data page shows the majority of the active rigs in Oklahoma fall within either the SCOOP, STACK, or MERGE.
This makes sense because operators are currently looking to tame risk, and as they begin to deploy capital they are increasingly seeking proven and reliable acreage to develop as opposed to wildcatting and looking for new discoveries in unproven plays. If commodity prices continue to march upward and hold above $80 per barrel I expect we will see the rig count continue to increase in the stack plays.
Record-setting prices as of late have lifted operating margins for Oklahoma drillers across the board, with internal rates of return in the state hitting historic highs in March 2022. In the liquids-rich STACK basin, half-cycle, post-tax IRRs jumped to about 57% in March. In the SCOOP, returns are now estimated at around 51%, according to a recently published analysis from S&P Global.
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