GlobalData’s latest report, ‘Scoop Stack Shale in the US, 2021 – Oil and Gas Shale Market Analysis and Outlook to 2025’ provides a comprehensive review of the natural gas appraisal and development activity in Scoop Stack shale play against the backdrop of Covid-19 pandemic. It analyses the competitive landscape for operators in these plays on the basis of permit activity, investment trends, type well economics, and mergers and acquisitions (M&A).
The Scoop Stack located in Oklahoma accounts for 4.5% of oil, and 7.2% of natural gas production in the United States Lower 48. Most of the oil production comes from the eastern part of the play and natural gas production increase while moving west. This play recorded its highest month of production in September of 2019, with 604 thousand barrels of oil per day (mbd) and 7.9 billion cubic feet per day (bcfd). After September 2019, the Scoop Stack has experienced a slow decline that was exacerbated by the effects of the Covid-19 pandemic.
To combat low commodity prices and weak demand due to the Covid-19 pandemic, most of the oil and gas producers reduced their planned capex guidance for 2020. Scoop Stack shale’s 11 major operators collectively cut their planned capital spending by 32% or $21.3bn from an initial capex of $66.3bn in 2020. This reduction also had a bearing on the pace of drilling and well completions in this shale play.
Devon Energy and Ovintiv Inc, the top two producers in the Scoop Stack shale, reduced their capex by 44% and 37% respectively, compared to initial capex spending plans for 2020. Another major player in this region, Continental Resources , also lowered its planned capital spending for 2020 by 54% after the crash in oil prices.
The Scoop Stack averaged 84 drilling rigs in 2019 and decreased to an average of 20 drilling rigs a 75% drop in 2020. Since commodity prices have stabilized from the Covid-19 pandemic rig count has increased a small amount in the Scoop Stack. But overall production is still declining in this region, while plays like the Permian Basin, Bakken, and Appalachia Basin have seen an increase in production in the second half of 2020.