The SCOOP/STACK Basin | October 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 October)
Total Rigs in Oklahoma- 14
Total Rigs in United States- 296
Total U.S. Rigs down 65% YTD
SCOOP/STACK Top Producers
Top Gas Producer- EOG Resources, INC.
More Confusion on Native Lands
A question whether Okoahoma can regulate oil and gas activities inside Indian Country is snaking its way through the Oklahoma Corporation Commission’s administrative judicial process. If you haven’t heard, this stems from the landmark 5-4 supreme court ruling over the McGirt v. Oklahoma case which was originally centered around the reservations’ relationships to the US Major Crimes Act. Now, it has opened the door to questions of whether or not the Native Americans have the right to regulate oil and gas activities on their land. The current argument claims that the McGirt case has set precedent that the reservations still exist for not just criminal, but civil and regulatory purposes as well. Because some wells exist in Indian Country, the Oklahoma Corporation Commission lacks jurisdiction to rule anything. The counter argument states the McGirt case established a criminal context, not a civil case involving property and a private operator that is based outside of Indian Country. While no immediate decision is clear, it will certainly be a tumultuous terrain to navigate in the time to come.
Environmentally Conscious Oklahoma
Many companies in Oklahoma (and in the United States in general) are turning towards solutions of reducing emissions and even incorporating renewables into their infrastructure. One of the reasons energy companies are evaluating a lower-carbon future is that investors’ tastes on the issues are changing. In October, Larry Fink, CEO of BlackRock, warned company executives from upstream all the way to downstream that climate change, “has become a defining factor in companies’ long-term prospects.” What exactly does this mean? Well a particular investment portfolio at any given capital venture investment agency is becoming less likely to build the companies that are not taking steps to become environmentally relevant into a portfolio. This means that fewer and fewer opportunities to invest in these companies will present themselves until they start looking at solutions of reducing their carbon footprint, because that is what investors want. While Chesapeake, Continental, and Devon are all Oklahoma based companies trying to become more environmentally compliant, their solutions are usually similar. They incorporate better leak detection technology, upgrade equipment, and “operational changes.” In steps Williams, a Tulsa-based midstream company who is taking BlackRock’s words very seriously, which makes sense as BlackRock is their third largest investor. Today, Williams handles 30% of the natural consumed domestically. By 2050 however, they plan to be a net-zero emitter. It will utilize the same strategies mentioned above, but they also seek to develop renewable natural gas opportunities and more renewable sources for electricity so that they may reduce compression costs and provide more energy to consumers. They also provide a significant amount of money to Colorado State University’s Methane Emissions Technology Evaluation Center and the Pipeline Research Council International. Williams also announced earlier this year that it would spend $400 million to build solar generating stations in nine different states to supply its transmission system with energy to run its compression and shipping operations. Lots of effort on the part of Williams, but it is not currently apparent if it will encourage more investors to give them their money.
Top Gas Producers (2020 cum)
Oklahoma Oil Production
Oklahoma Gas Production
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