Privately funded Citizen Energy, formed in 2012, drilled the Merge discovery well in September 2015 and 18 delineation wells before significant competitor interest emerged. The discovery, made by the Governor James B. Edwards well in the Sycamore formation, was Citizen’s first company well.
Augsburger stressed the important role that Anadarko Basin geology has played in Oklahoma oil and gas development from the earliest activity in the Cherokee Platform of eastern Oklahoma during the 1890s. All of the platform’s oil was charged from the Woodford formation in the deep Anadarko Basin, he noted.
The discovery of the Oklahoma City field in 1928 generated broader industry interest in the Anadarko. The Sooner Trend became a major play in the basin during the 1950s, and the STACK activity today, using unconventional methods, is an extension of that development, Augsburger said.
The Anadarko Basin extends from western Oklahoma across southwestern Kansas and into southeastern Colorado. “This is a gassy basin,” Augsburger said. “While there certainly is tremendous oil potential in the STACK, we’re not going to change the nature of the basin. It’s never going to be 80 percent liquids.” However, he said that Citizen is drilling preferentially for oil under current market conditions.
A 2,200-ft Production Column
The production column of the Merge area drawing Citizen’s focus is particularly attractive because of its stacked target objectives. “This is a completely charged Mississippian column sitting on top of an actively generating Woodford source rock, a 2,200-foot continuous hydrocarbon charge from Upper Devonian to Middle Mississippian,” Augsburger said. “This truly is an enormous resource.”
As a comparison to the resource base in the Merge focus areas, he cited the massive Hugoton field in southwestern Kansas and northwestern Oklahoma, which produces from the Permian structure of the Anadarko Basin—a shallower layer than those now targeted in the Merge play. While Hugoton is ranked as the eighth-largest gas field in the world, Augsburger argued that the resources in and around the Merge could be greater.
He focused on an approximately 5,000-sq-mile area, 125 miles long with multiple productive benches throughout, which in its thickest portions holds more than 400 Bcf of gas in place per section.
Citing the Anderson Half well, the deepest drilled by Continental Resources in the STACK play, Augsburger noted its bottomhole pressure (BHP) of more than 11,000 psi and very high pressure gradient exceeding 0.8. Similarly, he pointed to Citizen’s RLP No. 2A well, the deepest on record in the STACK, which recorded a BHP of more than 13,000 psi and a pressure gradient higher than 0.8.
“When you combine that with a 2,200-ft hydrocarbon column, you’re encountering 411 billion cubic feet per section,” Augsburger said.
Multiple Zohr Field Equivalents
For perspective, he noted Eni’s recent Zohr field discovery offshore Egypt, which is a 30-Tcf field with recoverable resources of 22 Tcf. The resources owned by Continental in the deep-STACK gas play, covering two townships, are equivalent to “an entire Zohr field,” Augsburger said.
“And there are more, deeper than that,” he continued. “So each thousand feet we can extend this play into the basin, we are opening multiple Zohr fields. This is an enormous resource in place. It’s going to take an enormous amount of money to develop it.”
Citizen has formed a succession of exploration and production investment funds. These include Citizen Energy II, which has recently entered a joint venture (JV) with Linn Energy. The equal JV, called Roan Resources, combines 140,000 net acres across eight counties, from which the venture will develop oil and gas in the SCOOP, STACK, and Merge plays. Roan is slated to launch an initial public offering in late 2018 or early 2019.
Citizen Energy III has retained 50,000 acres in the STACK play, which it is actively developing.
‘Enormous’ Merge Play Resource Rivals Major World Gas Fields, Largest Discoveries
Joel Parshall, JPT Features Editor
18 March 2018
Compiled and Published by GIB KNIGHT
Gib Knight is a private oil and gas investor and consultant, providing clients advanced analytics and building innovative visual business intelligence solutions to visualize the results, across a broad spectrum of regulatory filings and production data in Oklahoma and Texas. He is the founder of OklahomaMinerals.com, an online resource designed for mineral owners in Oklahoma.