Updates
March 24, 2013: Phillips 66 betting on SandRidge, Mississippi Lime.
February 25, 2013: Chesapeake sells 50% of its acreage in the Mississippi Lime to China's Sinopec.
February 25, 2013: Part II of Mike Filloon's series on the Mississippi Lime.
February 23, 2013: Mike Filloon begins a series on the Mississippi Lime and starts with SandRidge.
January 14, 2013: SandRidge takes a page from the Chesapeake playbook -- maybe the whole playbook.
January 8, 2013: Kansas rolls out the red carpet for fracking companies.
December 19, 2012: sells Permian Basin assets for $2.6 billion -- Reuters
December 17, 2012: an update on SandRidge experience in the Mississippi Lime -- SeekingAlpha
August 30, 2012: SandRidge undervalued -- SeekingAlpha
August 9, 2012: Mississippi Lime/SandRidge at SeekingAlpha.com.
August 8, 2012: the Mississippi Lime sprawls northward into Nebraska.
Horizontal wells in the US Midcontinent Mississippi lime oil play aren’t as productive as those in the Williston basin Bakken, but shallower depths and cheaper drilling costs are driving increased interest in the Mississippi lime, ...August 6, 2012: the eastern limb of the Mississippi Lime is attracting more operators. Shallow but lots of water.
The land play has expanded to more than 17 million acres in northern Oklahoma, western Kansas, and southern Nebraska, ...
“This is a shallow carbonate play, with depths ranging from 3,000 ft to 6,000 ft, and since it’s shallower than other US unconventional plays, operators can employ less expensive, lower horsepower rigs to drill it.”
The formation is now being drilled horizontally after having produced through vertical wells for more than 50 years. IHS Inc. noted last week that the land play covers more than 17 million acres in northern Oklahoma, western Kansas, and southwestern Nebraska.July 15, 2012: new SandRidge corporate presentation. I don't follow SD but their slides say shallow, conventional, and horizontal. If conventional, they should not be fracking? Back in 2010 they were producing 2,000 boepd; now SD is at 32,000 boepd. Answer from a reader: conventional wells in the Permian Basin do not require fracking. The Mississippi Lime is unconventional shale, requires Bakken-like completion. Because the Mississippi Lime is more shallow than the Bakken, it has cost advantages.
Devon Energy Corp. said it has increased its exposure to the light oil resource play to 545,000 net acres. Other acreage holders on the eastern limb include Range Resources Corp., Highmount Exploration & Production Co., Halcon Resources Corp., PetroQuest Energy Inc., and numerous private entities.
SandRidge Energy, which plans to drill 380 Mississippi lime horizontal well by the end of 2012, expects to be running 33 rigs at the end of the year.
Four of the 29 rigs SandRidge is now running drill disposal wells, given that Mississippi Lime wells produce 90% water along with commercial volumes of oil. SandRidge told investors it plans to drill 10 producing wells for every disposal well when it reaches development mode compared with five producing wells per disposal well at present.
June 18, 2012: Sandridge -- 15 billion bbls of recoverable oil in Kansas; drilling to continue for at least ten more years;
June 4, 2012: new SandRidge corporate presentation.
June 1, 2012: trailers renting for $2000/month in Kansas. These are not FEMA trailers.
May 31, 2012: CNBC has discovered the Mississippi Lime in Kansas.
Tom Ward [Sandridge] says oil output in the region by the end of the decade will grow to rival the production seen in the Bakken Shale in North Dakota, ramping up from just over 3.5 million barrels a month, to well over 18 million barrels of oil and gas. And with it, he expects a similar boom in economic development.May 6, 2012: Things To like about SandRidge -- SeekingAlpha.com
"Overall, the impact of Kansas, in our opinion, will be an additional 1000,000 [sic -- 100,000?] jobs that will be coming in the next 15 years," Ward says.
Original Post
... on the way down to the Woodford Shale (downdip to the southwest of the Mississippian play area), producers had to drill through the Mississippian formation—a thick, porous carbonate deposition that extends over millions of acres in northern Oklahoma and southern Kansas. Woodford operators realized the formation had porosity, permeability, and lots of hydrocarbon shows. In fact, the Mississippian has produced commercially from thousands of vertical wells for more than 50 years.And more, from the SandRidge Energy perspective --
However, what suddenly has jumped the Mississippi formation to the front of the line as a top-flight onshore oil play is the same set of technologies that independent operators are deploying to enable economic shale development: horizontal drilling and multistage completions. With the industry’s focus turning to liquids-rich plays, the horizontal Mississippian oil play is right in the thick of the action.
In fact, the Mississippian play in the Mid-Continent region has cost advantages to other emerging plays because of its shallow drilling depths and low horsepower requirements for hydraulic fracturing. The added bonus for Mississippian operators in Oklahoma and Kansas is that they are working in the heart of the Mid-Continent, with ready access to transportation infrastructure, services, equipment and skilled personnel.
Oklahoma City-based SandRidge Energy was an early mover in the Mississippian horizontal play and is in the process of putting together a second major land position. Although Matthew Grubb, president and chief operating officer, cannot publicly disclose exactly where the new acreage holdings are being acquired because of leasing considerations, he notes that the geological characteristics are very similar to its original Mississippian play, and there is good reservoir control and production history because of the thousands of vertical wells that have been drilled in the area.Now, from the 1Q12 SandRidge earnings conference call --
“We have identified and are actively pursuing acreage in a second Mississippian play,” says Grubb.
“Our original position is 900,000 acres in northern Oklahoma and southern Kansas. In the new Mississippian play, we have leased about 400,000 acres with the goal of ultimately leasing 1 million acres. It is the same type of rock, depth and vertical production characteristics that we see in our original Mississippian play.”
We anticipate ending the year at 32 horizontal rigs and project ending 2013 45 horizontal rigs drilling for shallow, conventional oil across Northern Oklahoma and Kansas. We believe our industry will create over 100,000 jobs across this area over the next 5 years, and we'll play -- and we'll have a play as large and as important as the Bakken is to North Dakota and Montana. So we think it's a good use of capital to increase land in an area have already sold for more than 10 times your investment and are drilling exceptional wells instead of trying to find a new area to buy and start all over again.Disclaimer: this is not an investment site. I posted this because it's part of the "North Dakota to Texas Renaissance Zone" which has gotten me very, very excited. This is still a Bakken blog, but there may be additional stories on this and other plays north-to-south in fly-over-country.
This post is not a buy, sell, hold recommendation. I made my first purchase of SandRidge earlier this week and expect to accumulate more as opportunities present.
