America’s ride towards energy independence has really been driven by one thing — shale. As producers continue to use hydraulic fracturing and dive head first into our various shale rock formations, they’ve been able to unlock a sheer abundance of natural gas and oil.
As a result, fields like the Bakken and Marcellus have been become household names.
However, as the Bakken and company have become standard fields in the energy lexicon, much of their “booms” have already been realized from early investors. Sure, these super fields will continue producing plenty of energy for years to come. But the initial euphoria that comes with finding the next big thing has already passed by many investors.
Which is why investors looking to “wildcat” their way to gains should perhaps focus some attention to the Southern Central Oklahoma Oil Province, or SCOOP shale.
SCOOP is just beginning its journey on becoming a massive liquids rich shale play. That could mean some big bucks for early energy firms and their investors.
Getting the SCOOP
Like Texas, North Dakota and Pennsylvania, Oklahoma has a long history of oil production and is steeped in energy tradition. The state has been a huge source of crude oil and natural gas for decades, and around 9% of all active oil wells currently lie within the Oklahoma’s borders. And like its fellow energy-rich states, hydraulic fracturing is helping rewrite that history forward.
Underlying most of Oklahoma, the Woodford shale is an interesting mix of natural gas, natural gas liquids and shale oil. However, given the Woodford’s vast size and complex nature, those various energy types aren’t spread evenly throughout the shale. There are places that are more “gassy” than others.
That’s a big problem considering the relatively low prices of natural gas.
However, the SCOOP portion of the Woodford — covering about 3,300 square miles — is very liquids-rich. Featuring multiple pay zones and a variety of NGLs and shale oil, early estimations predict that the SCOOP could contain upwards of 70 billion barrels of oil. Putting that into perspective, the latest U.S. Geological Survey estimates only put the Bakken at 7.4 billion barrels of undiscovered and technically recoverable oil.
Aside from the larger resource potential, the SCOOP has the Bakken beat on another front as well — infrastructure.
Given Oklahoma’s history as an oil producer — dating all the way back to the early 1900s — the state is littered with midstream infrastructure. There are literally thousands of miles worth of pipelines and gathering systems that crisscross and dot its countryside, including the United States’ main oil storage depot in Cushing. With this extensive network of energy logistics in the SCOOP’s backyard, producers have much easier time getting their oil to market than say, someone trying to tap a remote well in the Bakken.
All in all, that reduces costs and makes the SCOOP are desirable place to drill.
Still Time To Get In
With drilling activity in the SCOOP just starting to get underway, investors an early opportunity to get in before it really takes off. Several energy firms have already made the SCOOP a major part of their CAPEX and exploration plans.