Crushing oil prices are hitting U.S. shale producers hard and the outlook for 2016 shows little sign of a let-up. Production has continued to prove resilient but the odds are that something has to give at these prices. However there are still sweet spots in U.S. shale plays where producers are increasing acreage and drilling new wells. The headline plays that many analysts talk about are the Delaware and Midland basins in the West Texas Permian but as we outline in today’s blog there is also continued interest in the relatively less well-known central Oklahoma SCOOP and STACK plays.
The Anadarko basin covers approximately 60,000 square miles centered in the western part of Oklahoma and the Texas Panhandle and extending into western Kansas and southeast Colorado. Like the Permian Basin in West Texas, the Anadarko is certainly not a “new” oil and gas basin but has been extensively and successfully exploited since the 1920s using conventional vertical drilling technology. Over the past four years the basin has been successfully targeted by producers using horizontal drilling and fracturing technology to extract unconventional oil and condensates from shale. The Anadarko basin is also similar to the Permian Basin in that it contains multiple layers of oil-bearing formations that can be exploited by drilling at different depths (see Stacked Deck). The Anadarko basin encompasses four main shale era plays - the Mississippian Lime to the northeast, Cana Woodford to the southeast, Granite Wash to the southwest and Cleveland/Tonkawa to the northwest. The Anadarko shale is less consistent and harder to “unlock” hydrocarbons from as compared with the bigger plays like the Bakken or the Eagle Ford. However - as we have discussed in previous blogs – it has been the subject of much excitement in the drilling community with huge wells coming in that promise rich rewards. We talked about some of these opportunities back in December 2012 (see Panhandle Hog Shoot). We also referred to the ingenuity of Anadarko producers in cracking the code back in October 2013 (see Never Try To Tame A Wildcatter).