Oklahoma reaches for the Scoop
It’s called the Scoop — the South Central Oklahoma Oil Province — and it could be North America’s biggest and most productive unconventional shale play yet
According to Oklahoma City-based Continental Resources, the Scoop could hold 1.8 billion barrels of oil equivalent (boe) in Oklahoma’s Woodford shales, the source rocks for some of the state’s biggest oilfields discovered more than 100 years ago.
The Woodford is a Devonian-era shale that company officials describe as the “geologic sibling” to the Bakken in North Dakota. But the Woodford is as much as 40 times thicker than the Bakken, at 400 feet, and holds as much oil despite covering only a quarter of the surface area of 3,300 square miles.
According to a 2010 assessment by the US Geological Survey, the broader Woodford formations in the Arkoma and Anadarko basins could hold 70 billion boe of undiscovered resources. Since 2005, activity focus has focused on the Cana field, which is estimated to hold 12 billion boe.
The Scoop could rightly be described as an extension of the main play, but it has geologic characteristics that make it unique. Continental thinks the main reservoir could be as much as six times larger than Cana.
Spread across four counties near the southern border with Texas, Continental has nearly doubled its land holdings since 2010 to capture more than 170,000 acres across the heart of the fairway. That’s enough land to support more than 2,200 future wells on 80-acre spacing.
Continental is already the largest leaseholder in the Bakken, with more than 1million acres. However, chief executive Harold Hamm told the company’s investor open house that much of the Bakken has been open for just eight years. It may take another decade to realise the play's full potential.
By contrast, conventional fields in the Scoop have already produced more than 3 billion cumulative barrels over the past 100 years, including the Sho-Vel-Tum field that has brought forth 1.43 billion barrels since it was discovered in 1905.
The latest drilling results are equally encouraging; initial test results from 35 wells have ranged from 702 barrels of oil equivalent a day (boe/d) to 1,771 boe/d. The proportion of liquids has ranged from 53% to 80%, which compares favourably with either the Bakken or Eagle Ford.
But the Scoop is significantly deeper than either of those plays, up to 16,000 feet, and future profitability rests on bringing down drilling and completion costs. In addition, hydraulic fractures have to be fine-tuned to take advantage of the thicker pay zone.
Continental says it has managed to reduce the price of a new well by almost 60%, to $9 million per well from more than $10.7 million in 2010.
Despite the cost, the Scoop remains attractive. Continental estimates 40-55% rates of return based on an oil price of $90 per barrel and $3.50 per million British thermal units for natural gas.
The company has set a target to triple production within the next five years, to more than 280,000 boe/d. It has also set a target of doubling its proved reserves to more than 1.5 billion boe from 610 million boe at the end of the second quarter. Success will depend on how prolific plays like the Scoop ultimately prove to be.
Said Mark Fisher, Continental’s senior land manager: “This is not your ordinary Woodford. It was deposited under ideal conditions, that’s what’s making this play tick.”