The Anadarko Basin centered in Oklahoma and the Texas Panhandle has not yet developed production on the scale of the Bakken, Eagle Ford or Permian plays. Like the Permian Basin the Anadarko is an old field being recycled using horizontal drilling and hydraulic fracturing techniques. Spectacular initial production of over 5Mb/d from wells in the Granite Wash Hogshooter formation this year has excited producers. Today we look at the basin’s development.
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 not a “new” oil and gas basin but has already been extensively and successfully exploited using conventional vertical drilling technology. Parts of this basin are being 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 New Adventures of Good ole Boy Permian for more on these techniques). The map below shows the current centers of crude production in the region – the darker green shaded area to the left of the center is the Anadarko Basin. The production centers are the Granite Wash, the Woodford Shale and the Mississippian Lime and we cover each in turn below. The map also shows the Ardmore basin Woodford Shale that is a dry gas play where drilling has declined with falling natural gas prices.
Source: Range Resources Investor Presentation (click to enlarge)
In 2010 the US Geological Survey estimated the mean technically recoverable resources in the Anadarko to be 495 MMBbl of oil, 27.5 Tcf of natural gas, and 410 MMBbl of natural gas liquids. Bentek estimates that November 2012 Anadarko basin production was 55 Mb/d in Kansas, 175 Mb/d in Oklahoma, 4 Mb/d in Colorado and 110 Mb/d in Texas for a total of ~350 Mb/d with expected growth to 450 Mb/d by the end of 2016. The crude oil produced from the Anadarko basin is light sweet crude similar in quality to West Texas Intermediate (WTI), the Permian Basin crude used as the delivery benchmark for the NYMEX futures contract. Crude oil postings for the Anadarko Basin in the Texas and Oklahoma Panhandles, published by Phillips 66 are priced at a fixed discount of $3.88/Bbl to WTI NYMEX (see The Bakken Buck Starts Here for an explanation of how the posting system works). That differential reflects gathering costs and the cost of shipping to Cushing, OK the major regional trading hub and delivery point for NYMEX crude.