West of U.S. Highway 81 in central Oklahoma is definitely better. At least that’s the evolving narrative about the Mississippian. The geologic play has become a tale of two geographies. On the one hand, interest is fading for Mississippian Lime targets east of U.S. 81 because of low commodity prices and high water cuts. The evidence is found in a crumpled rig count, which dropped from 61 at its peak in October 2014 to just four in May 2016.
On the other hand, the rig count has been steady in the Mississippian-aged Meramec west of U.S. 81. Indeed, while the pace of completions nationwide slows in headline unconventional plays such as the Eagle Ford and Marcellus—both down by almost half versus last year—it is a different tale for the Mississippian, which has seen completions steady between 65 and 70 wells quarterly with an incremental upward bias.
Outside of Oklahoma, the horizontal rig count fell to zero in Arkansas’ Mississippian-aged Fayetteville Shale in January 2016, while Mississippian-aged Barnett Shale horizontal rig activity has been scraping along with one or two rigs active. The Oklahoma story line involves a phase shift to oilier Mississippian targets closer to the Anadarko Basin trough. Geologically, it is a matter of moving beyond the shelf margin and shallow carbonates into basin-centered targets.
A major benefit of the Mississippian phase shift is revitalized interest in the Anadarko Basin as a stacked play bonanza, echoing the promise found in stacked plays such as the Permian Basin. It’s a nice outcome for the Anadarko. When the industry went liquids-rich in 2011, Anadarko Basin Pennsylvanian-aged Granite Wash targets moved front and center, and the Granite Wash rig count peaked at 75 units in October 2014. But the commodities market has not been kind to natural gas, or natural gas liquids, and the rig count fell below a half -dozen units in second-quarter 2016, mostly focused on oilier targets in the Cleveland and Tonkawa sands.
Just when interest in the stacked-play Anadarko appeared to wither, news surfaced about Newfield Exploration Co.’s Mississippian-aged Stack discovery in Kingfisher County. Recently, the industry has learned that Mississippian targets west of Highway 81 feature more oil, less water, and are leavened with liquids-rich natural gas. Currently, the aerial extent of the Mississippian play is still under delineation and now encompasses a majority of Kingfisher County as well as portions of Canadian (Cana Woodford), Blaine and Custer counties, all west of U.S. Highway 81 and Oklahoma City.
One challenge in understanding the Mississippian arena is deciphering the nomenclature. Thus, discussion on Mississippi chat, Mississippi Solid, Osage, Sycamore or Springer formations are variations on time-equivalent geology located beneath different geographic designations, depending on whether the effort occurs in the northern or southern Anadarko Basin.
The Tower of Babel Mississippian geologic nomenclature also encompasses the Chester Lime, which is an upper Mississippian iteration. The Meramec, or middle Mississippian, counts the Barnett Shale in Texas and the Fayetteville Shale in Arkansas as temporal relatives geologically, though both plays are primarily dry gas versus the oil-weighted Meramec.
A second challenge is the intertwined nature of the underlying Devonian-aged Woodford Shale and the overlying Mississippian. Several operators are jointly developing Woodford and Mississippian targets, which adds complexity to compiling data on the extent of the play.
An informal review of state records dating back to the second quarter of 2015 finds the Mississippian as a target in more than 400 completions. Of those, roughly 250 were in Oklahoma, including more than 150 in the Mississippian Lime. Almost two-thirds of those Lime completions occurred in Oklahoma’s Alfalfa and Woods counties, where the pace of activity has since slowed.
Indeed, the Mississippian Lime is the old story. Evidence for the new narrative is found in the A&D market, including Devon Energy Corp.’s $1.9 billion acquisition of Felix Energy LLC in December 2015, which added 80,000 net acres in the over-pressured Stack play (Mississippian Meramec). And in April 2016, Newfield acquired 42,000 net acres with Stack potential from neighboring Chesapeake Energy Corp. for $472 million.
In an industry burdened with an activity drought, western Oklahoma’s burgeoning Mississippian play is providing a gentle rain of drilling.
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