October 20, 2012: Z-Man on Chesapeake, Scoop at SeekingAlpha.com.
The rationale for the high per-acre valuation for the "sweet spot" acreage is best illustrated by the slides from a recent Continental Resources' (CLR) presentation which show a remarkably thick, premium quality Woodford Shale deposition underlying the area in which a significant part of Chesapeake's acreage is located (Continental refers to the southern extension of the Cana Woodford play as "SCOOP," which stands for South Central Oklahoma Oil Province).
Continental Resources Inc. says a shale-oil discovery in Oklahoma may add the equivalent of 1.8 billion barrels of crude to the company's reserves as it drills more than 2,000 wells in coming years.
The South Central Oklahoma Oil Province, or SCOOP, lies beneath oilfields that began producing crude as early as 1905, Oklahoma City-based Continental said in a slide presentation prepared for a meeting with analysts Tuesday.
The geology of the discovery is similar to the Bakken Shale region in North Dakota and Montana, where Continental is the largest holder of drilling rights, according to the presentation.
The company has been quietly amassing drilling leases in the SCOOP since at least 2010 and now holds 170,600 acres. The wells Continental has so far drilled in the SCOOP have cost about $9 million apiece.
Continental is exploring for crude in two other "stealth" prospects in the U.S., company President Rick Bott said during the presentation. He declined to identify the location or estimated size of the fields.