Playbooks Supplements

Scoop-Stack Playbook 2017

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SCOOP/STACK: OVERVIEW | September 2017 | 5 than seven reservoirs. (The Mayes is another Missis- sippian target, according to WoodMac, but results are not yet available.) "But the rule of thumb, in any area, is that there are two economic targets—and for the most part, just one, with upside from another," Van Slyke said. "In the Scoop, it's Woodford with upside from Springer. In the Stack proper, it's Meramec with upside from Woodford." WoodMac estimates that at $50 oil, the Cana- Stack, the Stack oil and the Scoop core are in the money. Devon, Continental Resources Inc., Newfield Exploration, Cimarex Energy Co. and Marathon Oil Corp. are the heavyweights in the Scoop/ Stack, joined by an increasing number of private companies, many backed by private equity. The Scoop/Stack is still immature, and in 2017 and beyond companies will put more science and technol- ogy to work to determine optimum drilling and com- pletion strategies and spac- ing density, stacked pay potential and more. Stepping out Operators have been testing three main play extensions, according to the WoodMac ana- lysts. The first, the "Merge," is a private-equity success story, Van Slyke said. Citizen Energy II LLC, backed by QuadTwo Capital Partners, has proved the Scoop/Stack border can work with Woodford as the main and Sycamore as the Mis- sissippian target. The play centers on where the Meramec thins toward the south and the Syca- more emerges. Citizen began drilling in the Merge in 2016 along with companies that bought into the learning experience or held legacy positions, like Continen- tal Resources Inc. and LINN Energy Inc. Citizen is focusing its entire portfolio on the Merge; Jones Energy Inc. bought into the play last year through its acquisition of assets in southern Canadian and Grady counties from Scoop Energy Co. In its early May earnings call, Jones Energy told investors it was pivoting away from the Cleveland play toward the Merge and hoped to ramp up to three rigs there later this year. At press time, the company had put its first two Merge wells on production and its first Sycamore well was imminent. "We optimistically await company Merge results given strong positive releases we have seen from offset operators in the play," said SunTrust Robinson Humphrey analyst Neal Dingmann. "There are two main issues with the Merge," Van Slyke said. "First is infrastructure, because gas gathering lines and processing capacity are needed. The second is Oklahoma's forced pooling. Jones Energy bought into 200 units and is still trying to gain operatorship of those units, making it hard for it to ramp up quickly." Chesapeake includes the Merge in its "Wedge" play, which comprises all its acreage prospective for the Mississippian reservoir. A recent report from Guggenheim Securities' Subash Chandra said Ches- apeake Energy Corp. had reported a "handful of new, encouraging well results" in Canadian County to derisk the Wedge Meramec. "One in particular caught our attention," the analyst and co-authors said. "The Johnston 1H in the southern Canadian County 'Meramec Silt' had an IP-30 of 1,360 boe/d (31% oil). This was 30% better than the previously reported Hunt offset well, though Hunt was 45% oil. Operators are testing play extensions while optimizing drilling and completion methods in the core areas of the Scoop/ Stack. (Data courtesy of Wood Mackenzie North America Well Analysis Tool, ESRI Basemap) Jessica Van Slyke

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