The SCOOP/STACK Basin | July 2020
Ranking 6th in oil production and 3rd in natural gas production, the SCOOP/STACK play is one of the largest fields within the continental United States. It is primarily a shale play, with the Anadarko and Ardmore basin’s providing a bulk of the production. Some of the top formations are the Woodford Shale and Hunton Carbonate.
State Drilling Statistics (End of July)
Total Rigs in Oklahoma- 11
Total Rigs in United States- 251
Total U.S. Rigs down 73% YTD
Financial & Economic Updates
Not a lot of financial information to be presented this month within the Permian outside of mass restructuring. Please navigate to the periodicals page, or listen to a podcast that we have uploaded recently to supplement your knowledge of the industry in the present.
Fuzzy Border Lead to Fuzzy Funds
The US Supreme Court has recently ruled that about half of the land in Oklahoma is actually designated as Native American reservation land. While this is a big win for the Native Americans in Oklahoma, this is surely going to lead to a huge tangled ball of legal, regulatory, and tax problems within the state. Native Americans will now have more say in terms of the severance tax that they may be owed, or in the approval of pipelines with their newfound regulatory authority. In the short term, the Five Tribes of Oklahoma stated that they were working together on a framework of shared jurisdiction to “support public safety, our economy, and private rights.” This could potentially be a beneficial thing for oil and gas, especially in the form of pipelines. This would provide more of a voice in regards to pipelines, and the incentives of severance and tax to the tribe would be reason enough for them to allow oil and gas operations. As much potential as this has to be good, it could be just as bad thanks to taxation. Everyone will want a piece of the pie, and the state and feds are already eating their share. How do the tribes want to proceed in collecting severance as much of their newly recognized old property has oil and gas activity on it? As it stands, the tribes say that halting production is unlikely, but asking for some of the money from production is still on the table. Once the overlap of federal, state, and tribal issues are sorted through, it is possible that this could be the beginning of a new chapter of energy for Oklahoma.
Order in the Court
Oklahoma has recently picked a new head of the State’s Land office, but Governor Stitt is not pleased with the decision’s reception. Former energy executive Elliot Chambers si to begin as the interim secretary August third at a whopping $170,000 salary. The Lieutenant Governor and Secretary of Agriculture joined the meeting approving Mr. Chambers hire, but the State Auditor and Superintendent of Public Instruction were absent. Chambers was the former CEO of White Star Petroleum LLC, who filed for bankruptcy in May of last year and owed the land office that he is going to work at $207,000 in underpayments and interest for oil and gas deductions and valuations. The governor continues to argue that Chambers is the right man for the job, but he is certainly displeased with the lack of support from the rest of the local government. When pressed for comments, one of those absent said there was a scheduling conflict, and the other did not provide a comment. Time will tell if tensions will destroy this agency from the inside out.
Oklahoma Oil Production
Oklahoma Gas Production
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