With breakevens ranging from USD29–43/bbl, Oklahoma’s SCOOP/STACK shale plays are living up to their reputation as the US’s hottest new area for horizontal development. Since 2013, more effective completion designs and core area development have yielded a ~70% increase in initial production (IP) rates, which are now competitive with rates for the Permian and Eagle Ford. Rig activity in the area is also reaching above 100 rigs and all-time highs, with recent interest on expanding beyond core areas to the northwest STACK and Merge plays.

STACK: higher IP rates from the over-pressured area

Horizontal development of the STACK area began in the Cana-Woodford in 2007, with activity in Logan and Payne counties to the east picking up several years later. In late 2013, operators discovered the opportunities of Meramec formation and shifted their focus to the core areas in Kingfisher and Blaine County, and have been focusing on this area since.

Wells within the core are drilled in the Woodford and Meramec formations, though the best IP rates are found in Meramec wells in the over-pressured zone, which boasted an average peak month IP rate of almost 900 bbl/d in 2016. Due to the increased depth, higher pressure gradient, and the need to run a third casing string, drilling and completion (D&C) costs in the over-pressured area can be over USD1 million higher than in normally-pressured areas, although over-pressured wells achieve better IP rates. Since 2014, operators have been improving completion design in both normally-pressured and over-pressured zones, and pumping 27% and 15% more proppant from 2015 to 2016, respectively. The new completion design appears to be more successful in over-pressured zone with 35% jump in peak oil IP rate per lateral. (by Alastair Nojek and Yinsheng Li, Energy Insights by McKinsey)

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