Several factors drive success in a basin’s drilling campaign, and optimizing the risk-reward tradeoff is key, particularly in today’s market. Oklahoma’s STACK play exhibits many of the key characteristics needed to interest investment capital.

For one thing, the play has multiple target formations, providing plenty of source rock potential. Additionally, the establishment of key drilling areas has led to successful well delineation. And impressive well results are leading to positive valuations for STACK players. Given current economics, the play is likely to continue its forward momentum and be poised to explode when prices recover.


Onshore regulatory overview

By Jack Belcher and Beth Everage, HBW Resources LLC

It is no secret that over the past several years the U.S. oil and gas industry has faced an onslaught of stringent federal and state regulations that have severely hampered and threatened operations. This has been especially challenging during the recent period of low commodity prices.

The surprising results of the 2016 presidential and congressional elections signal a potential new course regarding energy policy and federal regulations. President-elect Donald Trump has vowed to reverse many of the Obama Administration regulations targeting fossil fuels and embark on policies that support the exploration, development, transportation, processing and utilization of fossil energy. While many policies and regulations are difficult to reverse, the industry can expect a few major announcements and reversals early on. Others will require actions by new cabinet-level and other political appointees in the federal departments and agencies. Still other changes will require congressional action.

Over the coming months the industry can anticipate several pro-energy regulatory efforts to impact unconventional oil and gas development including:

  • Executive orders: overturning numerous punitive regulatory actions from the Obama administration that negatively impacted energy (i.e., methane rule, well control);
  • Hydraulic fracturing: reversing regulatory actions such as the Bureau of Land Management (BLM) rule regarding hydraulic fracturing on federal lands and creating jurisdictional for unconventional activities;
  • LNG exports: simplifying and expediting the permitting process for LNG export facilities; and
  • Pipelines and infrastructure: addressing permitting and regulation of pipelines, transmission lines and other critical energy infrastructure.

In the meantime, a wave of punitive regulations, ballot initiatives and public relations campaigns have culminated into a last-minute regulatory push.

Below is a list of specific regulatory actions that are
ongoing at the federal and state levels. HBW Resources
will be providing monthly updates to this list.

Federal actions

  • Venting and Flaring: Waste Prevention and Use of Produced Oil and Gas (final rule effective Jan. 17, 2017): This rule requires oil and gas producers to implement measures to reduce natural gas emissions. The rule also revises existing royalty rate provisions to clarify when operators owe royalties on flared gas and restores the government’s congressionally authorized flexibility to set royalty rates.
  • Amendment to Commercial Oil Shale Regulations (final rule expected February 2017): This amends the BLM’s commercial oil shale regulations to address concerns about the royalty system in existing regulations and to provide more detail to the environmental protection requirements.
  • Farmington RMP: Mancos-Gallup Amendment (comment period closed Dec. 20, 2016): This addresses issues related to additional oil and gas development in the San Juan Basin.

State/local actions


  • Residents in Greeley have filed a lawsuit asking the Colorado Oil and Gas Conservation Commissions to vacate their approval of the proposed Triple Creek project;
  • Boulder County commissioners approved a “temporary emergency moratorium” extending the county’s current moratorium on oil and gas development through Jan. 31, 2017; and
  • The City of Broomfield will consider a temporary moratorium through June 13, 2017.


  • The Maryland Department of the Environment introduced rules (comment period closed Dec. 15, 2016) preventing hydraulic fracturing within 305 m (1,000 ft) of a private drinking water well as well as requiring protections against contaminated well water. The proposed rules will be the most stringent in the nation unless the state’s General Assembly intervenes with legislation to ban fracking statewide.


  • Gov. Terry McAuliffe approved new hydraulic fracturing regulations requiring mandatory disclosure of fracking chemicals, baseline water testing and monitoring, and spill prevention and response training. There is legislation proposed for the upcoming General Assembly session that will shield certain fracturing chemicals from disclosure under a “trade secrets” exemption.