One of the biggest winners could be Continental Resources (CLR). Already, the Bakken’s superstar, CLR has made the SCOOP its No. 1 focus in the upcoming few years. The firm has been snapping up acreage in the region and now sits on an impressive land holding of 330,000 net acres. The company plans on applying the same cost cutting and surgical-like drilling techniques that its uses in the Bakken into its new SCOOP acreage.
Overall, CLR estimates that its acreage in the SCOOP will produce around 1.8 billion barrels of crude. Perhaps more impressive, Continental estimates that those 2,240 future wells will generate returns on investment of between 40% and 55%. That’s some hefty profits for the top-notch energy producer if they come to fruition.
EROC — which is structured as an upstream master limited partnership (MLP) — holds nearly 16,000 acres in the liquids-rich window of the SCOOP. Given the firm’s small size, that acreage position is actually quite large and could be major driver to the MLP’s future distributions — currently at a 10% yield. So far, Eagle Rock saw an impressive 31% increase in its production as nine SCOOP shale wells went online during the past quarter.
Meanwhile, midcap XEC owns roughly 120,000 net acres across the Woodford — nearly 75,000 are right on the “fairway” of the SCOOP shale. That’s basically the area of the Woodford that begins to transition from dry gas to shale oil. Overall, that means Cimarex is sitting on best possible acreage to benefit from all three categories of hydrocarbons.
For investors, the Southern Central Oklahoma Oil Province is now out of the bag. SCOOPing up shares of CLR, XEC and EROC are the best ways to play it.
As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.