Shale Outlook Uinta: Horizontal Boom to Continue in 2025

Editor’s note: This is part of an ongoing series of Oil and Gas Investor articles examining major shale play trends— from electrification to M&A to infrastructure needs— as E&Ps enter 2025. 

Step aside, Permian Basin. Utah oil country is stealing headlines as operators search for new drilling runway.

With asking prices sky-high for Permian inventory and the best acreage locked up, E&Ps are digging deeper into the Uinta Basin’s stacked pay potential.

The Uinta Basin saw several large-scale transactions in 2024, and experts anticipate horizontal development of the basin will continue growing this year.

Operators including SM Energy and privately held FourPoint Resources entered Utah through large-scale M&A in 2024, picking up some of the Uinta’s highest quality inventory.

The most coveted Uinta rock is now in SM’s portfolio. SM teamed up with non-operating partner Northern Oil & Gas (NOG) to acquire leading Uinta E&P XCL Resources for $2.6 billion.

SM acquired an 80% undivided interest in XCL’s assets for $2.1 billion, while NOG picked up the remaining 20% non-op stake.

Analytics firm Novi Labs views SM’s Utah asset as the highest productivity rock in the Uinta Basin, with higher average reservoir pressure than most of its nearby producers. The Uteland Butte, the primary horizontal target in the basin, is fairly homogenous across the SM asset.

Building on the M&A momentum, Ovintiv agreed to sell its Uinta Basin position to private equity-backed producer FourPoint Resources for $2 billion in November. Using the money from the Uinta sale, Ovintiv deepened its legacy roots in Canada’s Montney Shale and the Canadian oil sands.

Ovintiv’s Uinta asset includes 126,000 net acres and production of around 29,000 bbl/d, primarily in Duchesne and Uintah counties, Utah.

The Ovintiv asset screens as the second-highest quality rock in the basin, by Novi Labs’ analysis. Although it has lower reservoir pressure than SM’s asset to the north, FourPoint’s assets include significant upside in the secondary Castle Peak and Douglas Creek benches.

Other publics are active in the Uinta Basin. Crescent Energy operates as Javelin Energy Partners and ranks as one of Utah’s top oil producers.

Publicly traded Berry Corp. has a long history of vertical conventional development in California, but the company aims to build momentum on its Utah asset, Berry CEO Fernando Araujo told Oil & Gas Investor.

Berry has been in the Uinta Basin since 2003, managing production from roughly 1,200 vertical wells targeting five different benches. But the company farmed into four horizontal wells adjacent to its acreage earlier this year.

The Uinta horizontal wells Berry farmed into outperformed expectations, with average gross peak production of around 1,100 boe/d, per well.

Berry later signed an expanded farm-in agreement to drill up to 12 Uinta horizontals, a few of which will target the deeper Wasatch bench, Araujo said.

“This could be transformational for Berry,” he said.

Private E&Ps in the Uinta include Scout Energy Partners, Wasatch Energy Management and Uinta Wax Operating.

With most of the best Uinta rock owned by SM and Ovintiv, producers are searching for upside in secondary benches. SM has identified 17 layers of stacked pay on the Uinta asset it acquired from XCL Resources.

Utah state records show that Anschutz Exploration drilled horizontal wells in Uintah County targeting the deeper Mancos Shale formation.