Oklahoma MERGE Play

This week our team attended a luncheon where the MERGE was the focus of discussion. Most are familiar with the SCOOP and STACK due to their media/investor presentation popularity, but the MERGE is still relatively new. In this article we take a brief look at the MERGE using public data to get a better understanding of the new play. 

Source: EnergyHQ.com

Source: EnergyHQ.com

 

LOCATION

As illustrated above, the MERGE is located between the SCOOP and STACK. For this article we limited our data to Canadian County, Grady County, and McClain County, and filtered to only include the townships between 08N and 12N.

Source: Drillinginfo Production (2016 - Present)

Source: Drillinginfo Production (2016 - Present)

Location.jpg
 

NUMBER OF WELLS

With the recent merger of Linn Energy and Citizen Energy, newly formed Roan Resources has the most number of wells currently, followed by Jones, Cimarex, Marathon, Newfield, and Travis Peak. 

 

Source: Linn Energy Investor Presentation

Source: Linn Energy Investor Presentation

 
Number of Wells.jpg

WELL RESULTS

Since our business is focused more on the land side we don't analyze production numbers in great detail on a regular basis. However, based on what we have experienced first hand and word of mouth, Oklahoma production data is somewhat lacking at times. Therefore, the below charts are based on available data.

 
Cumulative BOE.jpg
 

Camino Natural Resources has the best Average BOE Prac IP, however those numbers could be skewed a bit since the average is based on 2 wells versus Roan's average which is based on 68 wells. Roan is leading the way with the total BOE Prac IP with over 40,000; next closest being Jones Energy with 14,000. 

Per Drillinginfo: BOE PRAC IP - Daily barrel of oil equivalent (BOE) practical initial production (PRAC IP). (Prac IP is the based on the second month of production to represent the first "full" month producing). BOE = (oil + (gas/6)).

Per Drillinginfo: BOE PRAC IP - Daily barrel of oil equivalent (BOE) practical initial production (PRAC IP). (Prac IP is the based on the second month of production to represent the first "full" month producing). BOE = (oil + (gas/6)).

 

FORMATIONS

Source: Linn Energy Investor Presentation

Source: Linn Energy Investor Presentation

The majority of the wells are targeting the Woodford, Mississippian, and Hunton Formations. 

 

 

MINERALS and OIL & GAS LEASES

The 1st chart below illustrates the top mineral buyers in the MERGE for 2018. The number of buyers is actually less if you look at the 2nd chart. The 2nd chart takes the top Grantees of the 1st chart and applies them as Grantors. You can see that the majority of mineral buying is by Cherry Creek Minerals, which is related to LongPoint Minerals out of Denver, Colorado. 

MD.jpg
MD2.jpg
 

2018 OGL activity is illustrated in the below chart. Rebellion Energy, Camino Natural Resources, Newfield Exploration, Cockerell Energy, and Native Exploration lead the Lessee (Grantee) field. 

OGL.jpg
 

FUTURE ACTIVITY

For 2018, over 180 permits have been approved in the MERGE. According to the discussion referenced at the beginning, the MERGE has a lot of promising characteristics that favor positive well results. The STACK and SCOOP have been great additions to Oklahoma's historic oil and gas activity, and it is exciting that another play (and don't forget the ARKOMA) has the potential to continue Oklahoma's energy success!

Source: Drillinginfo (2018 Permits)

Source: Drillinginfo (2018 Permits)

 
  • Sources:
    • Production Data: Drillinginfo
    • Land Data: County Clerk Records

CONVEY ENERGY CONSULTANTS


The Conveyance Logo.jpg
Convey Energy