With M&A activity all around its Utah asset, private producer Scout Energy Partners aims to grow larger in the emerging Uinta horizontal play. (Source: Shutterstock.com)
Despite increased M&A activity around its Uinta Basin position, Scout Energy Partners aims to get deeper in Utah’s emerging oil play.
“We think there’s potential to grow still,” said Juan Nevarez, Scout’s executive vice president, during Hart Energy’s Executive Oil Conference & Expo in Midland, Texas.
Dallas-based Scout is heaviest in the Hugoton Field, which spans across the Texas and Oklahoma panhandles into southwestern Kansas. But the company expanded into the Uinta in mid-2022 by acquiring a property from Ovintiv.
The Ovintiv asset was a waterflood in the Monument Butte Field, southeast of Duchesne, Utah. The property included 90,000 net acres and around 3,000 gross vertical wells, most of which targeted the Green River Formation.
Since taking ownership of the waterflood asset, Scout has worked to test and develop the horizontal potential of its Uinta acreage, Nevarez said.
After closing the Ovintiv deal, Scout followed on with a farm-out that allowed Scout to delineate horizontal locations without risking much capital, he said.
Scout also added acreage through a swap with fellow Utah producer Uinta Wax Operating LLC.
“We also had made a deal with Uinta Wax where they took our deep gas position and we acquired additional acreage from them,” Nevarez said.
Asking prices for Uinta assets have gone up as M&A activity hit Utah over the past year.
This summer, SM Energy and non-operating partner Northern Oil and Gas (NOG) acquired Uinta operator XCL Resources for a combined $2.6 billion. SM acquired an 80% undivided interest in XCL’s assets for $2.1 billion, while NOG picked up a 20% non-operated stake.
SM and NOG picked up XCL’s assets for around $40,000/flowing boe this summer, according to Truist Securities data; Oil was trading at around $82/bbl at the time.
And in November, Ovintiv sold its Uinta assets to private producer FourPoint Resources for around $54,000/flowing boe; Oil was trading around $69/bbl, per Truist data.
RELATED
Now, the Uinta: Drillers are Taking Utah’s Oily Stacked Pay Horizontal, at Last
Untapped zones
Scout also sees opportunity to extend its Uinta runway by testing and delineating less popular landing zones underground.
Most of the horizontal development happening in the Uinta today is targeting the Uteland Butte interval.
“We think there’s opportunity to possibly go into the Castle Peak and Wasatch,” Nevarez said.
A few operators are already testing the Castle Peak bench, which overlies the Uteland Butte, and the underlying Wasatch bench with stimulated laterals. Drillers are also landing laterals in the shallower Douglas Creek.
SM Energy has identified 17 layers of stacked pay on the Uinta asset it acquired from XCL Resources.
Scout is working to optimize well designs in the Uinta Basin, but the company is generally going with 1,200 ft to 1,300 ft spacing, Nevarez said.
“There are some operators that tested smaller spacing, and that didn’t work out,” he said.
“The development that we’re going to be doing in the southern position is going to be within that spacing.”
RELATED
CEO: Ovintiv Passes on Permian Prices for More Montney Condensate
Recommended Reading
Civitas Makes $300MM Midland Bolt-On, Plans to Sell D-J Assets
2025-02-25 - Civitas Resources is adding Midland Basin production and drilling locations for $300 million. To offset the purchase price, Civitas set a $300 million divestiture target “likely to come” from Colorado’s D-J Basin, executives said.
Occidental to Up Drilling in Permian Secondary Benches in ‘25
2025-02-20 - Occidental Petroleum is exploring upside in the Permian’s secondary benches, including deeper Delaware Wolfcamp zones and the Barnett Shale in the Midland Basin.
Early Innings: Uinta’s Oily Stacked Pay Exploration Only Just Starting
2025-03-04 - Operators are testing horizontal wells in less developed Uinta Basin zones, including the Douglas Creek, Castle Peak, Wasatch and deeper benches.
Exxon’s Dan Ammann: Bullish on LNG as Permian Drilling Enters ‘New Phase’
2025-03-18 - Dan Ammann, Exxon Mobil’s new upstream president, is bullish on the long-term role of LNG in meeting global energy demand. He also sees advantages of scale in the Permian Basin.
Matador Touts Cotton Valley ‘Gas Bank’ Reserves as Prices Increase
2025-02-21 - Matador Resources focuses most of its efforts on the Permian’s Delaware Basin today. But the company still has vast untapped natural gas resources in Louisiana’s prolific Cotton Valley play, where it could look to drill as commodity prices increase.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.