OKLAHOMA REGIONAL REPORT

Energy Advisors Group has released a 39-page review of the SCOOP/STACK play in Oklahoma's Anadarko Basin as a continuation of our Market Monitor Series and thought leadership efforts. This 45-page Special Report provides unique perspectives on M&A, E&P and Capital Markets activity in the play.

Observations & Takeaways---

A&D - Quiet Market

• The SCOOP/STACK A&D market has been quiet since 2020 with <$1 billion in play-specific deals
• Historically, the STACK/SCOOP market includes about 6-8% of the overall U.S. deal values
• Harold Hamm took Continental Resources private (primarily SCOOP/STACK, Bakken) in a sign that public markets at the time were not adequately valuing the company
• SCOOP/STACK M&A being driven by private and private equity backed buyers
• Aside from Continental when it was public, the last impactful public buyer was in 2018 when Encana bought Newfield who had pivoted to a largely SCOOP/STACK player at the time of the deal

E&P - Improved Volumes and Performance

• Top 3, (CLR, OVV & DVN) make up ~49% of SCOOP/STACK gross operated volumes of ~980,000 boe/d
• ~26 total rigs running, 260 HZ permits pulled in the last 6 months and 520 new wells online in 2022
• Coterra’s recent well results are outperforming legacy wells by as much as 60% 
• Besides well results, improved planning and D&C are also driving down average cycle times 
• Devon is opting for bigger frac loads (>3,000 lbs/ft) and has deployed this method ~60 times
• Analysts expect stronger natural gas and NGL markets into 2024 could signal capital back to the basin

Capital Markets - Healthy Support

• Private equity dominates deal making with Kayne Anderson (89 Energy), Warburg Pincus (Citizen Energy, BCE (Mach Resources), NGP (Camino) and EnCap (Paloma) all doing deals in 2022
• Mach Natural Resources (Tom L. Ward CEO) filed for a $100 million IPO via sale of LP units on Sept. 22, 2023 with Bayou City Energy controlling the general partner
• 89 Energy (previously an NGP portfolio company) gets Kayne Anderson backing to consolidate several small SCOOP/STACK companies plus launch a SCOOP/STACK minerals company
• Royalty market remains liquid in SCOOP/STACK with Kimbell Royalties being the latest buyer
• Continental Resources was taken private in November 2022 and remains a significant SCOOP/STACK player with a long history of acquisitions in the area
• Canvas Energy (rebranded from pure play Chaparral Resources) successfully installs a new 4-year RBL facility in June 2023 with a $250MM borrowing base, $150MM commitment and $50MM draw
• compared to 38% decline rates in 2021

Operational Highlights - Corterra, Gulfport, Ovintiv, Marathon, Devon

• Coterra Resources (renamed after combination of Cabot Oil & Gas (Marcellus) and Cimarex (Permian, Anadarko)) is running 1 to 2 rigs in 2H 2023 and expecting $165 million in 2023 capex with highlight being the 7-well Evans pad expected online in Q4 2023
• Gulfport has seen a 75% improvement in well performance since 2020
• Ovintiv's SCOOP/STACK play is #1 in terms for free cash flow for core company plays
• Marathon is running a 2 rig program in 2023 as it seeks to maintain production and highlights a 3-mile Springer delineation well
• Devon 2Q2023 production of 89,000 boe/d was up 10% over 1Q2023 and is running a 3 rig program and leveraging its 133 well program DOW joint venture

Energy Advisors is working hard to expand our thought leadership and look forward to providing additional market insight for our clients through regional perspectives, M&A analysis and market monitor. 

Our firm has been serving the needs of buyers, sellers and capital providers for over thirty-five years.

TO LEARN MORE:

Energy Advisors Group

Brian Lidsky

Director

Phone: 713-600-0138

---Email: [email protected]

Corporate Office:

4265 San Felipe Ste 650

Houston TX 77027

Corporate Switchboard: 713-600-0123