The SCOOP/STACK Basin | September 2020
Field Overview
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 September)
Total Rigs in Oklahoma- 12
Total Rigs in United States- 261
Total U.S. Rigs down 70% YTD
Financial & Economic Updates
Poor Treasury
Collections for the state treasury of Oklahoma are 5% lower than they were in the month of August, primarily because of the low price and decreased production of oil and gas. This is the fifth month since February that total receipts were lower than the same month in the year prior. Tax collections received from oil and natural gas production were $35.1 million dollars less than one year prior. This marks the 12th consecutive month that gross prosecutions receipts were less than the same month of the prior year. Altogether, this means that oil and gas tax receipts have dropped by more than $430 million in the past year alone, and it is likely that the lack of returns will ripple into other sectors of the economy. Hopefully the amount of money hemorrhaged will slow in the upcoming months since prices increased to $42.34 for parts of August, but likely won’t be seen until a few months past September.
State Highlights
Oklahoma Merger
Devon Energy and WPX Energy have decided it would be in their best interest to combine their efforts and merge. Both of the Oklahoma based companies are claiming this is a “merger of equals” that they believe will create a new leading unconventional oil producer. This combination makes the two a heavy hitter in the Texas based Delaware basin with a combined 400,000 acres of coverage. The all stock transaction is expected to close sometime within the first quarter of 2021. The new organization does plan to achieve $575 million of cash flow improvements by the end of that year through decisions that are focused less on production growth. The merger pools 1.7 billion in cash along with 3 billion of undrawn credit capacity.
You’re Still Here?
Although Chesapeake Energy hasn’t been on the radar for the most recent months following their bankruptcy in June, they have just made headlines once again. The company is going through another round of layoffs for 200 employees or 15% of the remaining workforce. While this is not the news that anyone wants to be put on the map for, it is news nonetheless that the company is doing its best to pull itself from bankruptcy. Unfortunately they are doing so at the cost of their employees in the name of cost cutting. The layoffs are mainly at the headquarters in Oklahoma, and CEO Doug Lawler blames these layoffs on the current oil prices. The letter sent from Lawler himself read, “While Chesapeake is not alone in reducing staff during this challenging time, we recognize that does not dampen the disappointment in receiving the news.
Refining
Oklahoma Oil Production
Oklahoma Gas Production
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www.eia.gov
www.drillinginfo.com
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