Continental Resources unveils new Springer Shale play in Oklahoma
Houston (Platts)--18Sep2014/631 pm EDT/2231 GMT
Continental Resources unveiled results of the Springer Shale on
Thursday, a new Oklahoma oil play that could help boost the state's
already growing production to levels not seen in decades.
The Springer, chiefly sited in Grady and parts of Garvin counties at
12,500-foot depths, is yielding top-notch initial output rates and
economic returns, company managers said Thursday in webcast remarks
during Continental's 2014 Analyst Day in Oklahoma City.
The company's results in the Springer, combined with its own and the
industry's mounting production at the South Central Oklahoma Oil Play
and output from other formations in the state's subsoil, is adding to
Oklahoma's already mounting production of 345,000 b/d in June, according
to US Energy Information Administration data.
"Oklahoma could potentially become the nation's [third-highest]
oil-producing state," Continental CEO Harold Hamm said in opening the
2014 event, its first such investor gathering in two years.
Oklahoma's recent peak output was in 1982 at about 500,000 b/d. Today it
is the fifth-highest producing state. Texas ranks first, North Dakota
second, California third and Alaska fourth.
Continental, a pioneer in North Dakota/Montana's massive Bakken Shale
oil play reservoir, was instrumental in getting activity there off the
ground nearly a decade ago. Today it ranks first in production there
among dozens of operators at nearly 110,000 b/d of net oil equivalent.
The Bakken produces about 1.1 million b/d of oil.
Continental debuted SCOOP at its 2012 Analyst Day and produced 34,400
boe/d from it in the second quarter; the company expects 36,400 boe/d by
year's end.
In the two years since Continental first publicly showcased it, SCOOP
has become an industry phenomenon among Oklahoma players and has
attracted such large operators as Marathon Oil, Newfield Exploration and
several others.
In Hamm's estimation, SCOOP rivals the Bakken. He estimated
Continental's acreage holds about 3.6 billion boe of resource, against
the Bakken's 4.1 billion boe. And, the "type curve," or typical well in
the SCOOP, is 655,000 boe, compared to the Bakken's 603,000 boe.
Early wells in the Springer Shale -- located in the heart of SCOOP --
have shown a type curve around 940,000 boe, although they yield about
67% oil, compared with the Bakken's 85%. And the return rates for
Springer wells are high, about 105%, compared with 45% in the Bakken,
according to presentation slides showed by Continental's President and
Chief Operating Officer Jack Stark, who was named to his post Wednesday.
"If you liked the Bakken, you're going to love SCOOP," Stark said at the
Thursday meeting.
The company now has 112 operated wells in the SCOOP, including 86 wells
drilled in the two years since it first showcased the play.
The Springer Shale holds about 447 million boe of net resource potential
to Continental, which breaks down to 127 million boe in the oil fairway
and 320 million boe in the gas and condensate fairways. The company
holds 195,000 net acres in the play, including 118,000 net acres in the
oil fairway.
Continental drilled its first Springer well about 20 months ago and its
first 11 producing wells averaged a solid 700 boe/d each for 30 days.
The Springer complements SCOOP, Resource Development Manager Dan Harms
said.
"This is definitely an oil play and really exciting, even for
engineers," Harms said.
He said Continental's August production from the play alone averaged a
net 3,629 boe/d.
Also, in the Woodford Shale -- also within the SCOOP play, consisting of
earlier-age rocks below the Springer and prospective in an area south of
Oklahoma City -- longer laterals or horizontal legs of at least 7,500
feet are the order of the day going forward, Continental officials said.
That compares with around 4,500 feet previously.
The result is lower drilling costs of about 50% less per lateral foot,
officials said.
The Woodford is thick, up to 950 feet in some places, and has good
organic content porosity and permeability, said Andy Rihn, Continental
senior exploration geologist.
"We believe that extended laterals will further unlock the oil window,"
Rihn said.
Meanwhile, in the Bakken, development on tighter spacing continues, as
Continental reaps the benefits of its long expertise in the play. The
company has increased production 58%/year in the last three years and
reduced well costs to $7.5 million each at end-2013.
Continental's 4.1 billion boe of estimated Bakken resource potential on
its acreage is up from 3.4 billion boe just two years ago, said Stan
Wilson, the company's vice president of resource development.
And Continental keeps expanding its holdings there. In the past two
years, the company has added about 250,000 Bakken acres, said Don Key,
Continental's Bakken land manager.
"We think we'll get to look at acquisitions and trade opportunities
going forward," Key said.
--Starr Spencer, starr.spencer@platts.com --Edited by Jason Lindquist,
jason.lindquist@platts.com
© 2014 Platts, The McGraw-Hill Companies Inc. All rights reserved.
To subscribe or visit go to:
http://www.platts.com
http://www.platts.com/latest-news/oil/houston/continental-resources-unveils-new-springer-shale-21254918
|