What are the SCOOP and STACK?
I’ve heard the SCOOP and STACK mentioned several times since beginning my MLP education a couple of years ago. Whenever I hear the terms, my brain immediately reverts to the bend and snap. The bad news: after a little research, I’ve discovered the “bend and snap” and “SCOOP and STACK” are in no way related. The good news: I’m sharing what I learned about the SCOOP and STACK with you in the paragraphs that follow.
The South Central Oklahoma Oil Province (SCOOP) and the Sooner Trend Anadarko Canadian Kingfisher (STACK) are crude oil and condensate shale plays in Oklahoma. If you’re confused by the words that make up the STACK acronym, you’re not alone. Here is what I learned about the term:
Sooner – a person who claimed land in Oklahoma ahead of others back in the 1800s. Today, the term is used throughout the state to imply progressivism. Or, if you have any Longhorn friends, the word Sooner can trigger some pretty heated emotions in grown adults during the first few weeks of October.
Trend – used synonymously with the term play to describe an area in which hydrocarbons occur.
Anadarko – a well know basin in Oklahoma that contains many oil and gas fields.
Canadian and Kingfisher – counties in Oklahoma. The STACK is primarily in these two counties, but does run over into a handful of others.
To help you get a better idea of where exactly these two plays are located, our graphic designer created this helpful and delicious map:
These two Anadarko Basin plays are important and you should be familiar with them because industry experts say these two spots are very promising for producers. Rig counts in the STACK actually increased in 2015 as hundreds of rigs were halted in other areas. The reason for this is that with oil prices in decline, producers focused on their most productive areas only – and the STACK was one of these. The SCOOP has also been called a “sweet spot” where production has increased despite lower oil prices. Additionally, the plays are conveniently close to Cushing, OK allowing producers to inexpensively and conveniently get their product to market.
The SCOOP and STACK plays are not new areas. Each trend has been drilled using conventional methods, but have returned to the limelight over the last couple of years thanks to horizontal drilling. Some MLPs have positions in this area which have proved fruitful. Enable Midstream Partners (ENBL), for example, has enjoyed the perks of the stable rig counts on its gathering footprint in the region.
The SCOOP and STACK have become the “it” plays; if all goes well, certain producers could see a 75% rate of return on oil and natural gas in these areas, so the SCOOP and STACK are definitely worth keeping an eye on. Also, now that I think about it, if the point of the bend and snap is to attract suitors, and the SCOOP and STACK is attracting oil and gas production – maybe they DO have something in common after all.