As of January 2022, Oklahoma had 5 operable petroleum refineries with a combined daily processing capacity of almost 524,000 barrels per calendar day. That is 3% of the total U.S. crude oil refining capacity.
Oklahoma is among the top oil and natural gas-producing states in the country.
Despite the state’s overall number of working rigs decreasing slightly late in 2018 and early in 2019, the “Sooner State” boasts 14 of the nation’s 100 largest natural gas fields, plus the STACK and SCOOP plays which are rich in hydrocarbons.
The first oil discovery in Oklahoma came from Lewis Ross in 1859. He found a pocket of oil in Indian Territory, nearly 50 years before Oklahoma became a state. Today, nearly 150,000 Oklahomans work in the oil and gas sector, a State Chamber of Oklahoma Research Foundation executive summary says.
Our first well, the Andrews-1, will target the Hunton Limestone, one of the main hydrocarbon reservoirs in Oklahoma. Since 1921, it is estimated that 4,300 Hunton wells in 200 fields have produced 277 million bbl of oil.
The average productive life of a well producing from the Hunton formation is 18.5 years. The initial average Btu content of natural gas produced from this formation is approximately 1100 Btu, and this increases at an average of 5% per year and based on previous data, can ultimately reach approximately 2100 Btu.
The Hunton Formation is one of the most promising formations producing oil and gas in Oklahoma. The formation has an anomalous producing behavior. At the inception, the wells produce at relatively high water-oil and gas-oil ratios. Eventually, both the WOR and GOR decrease. This results in increase in oil cut and hence reduction in lifting costs over time.
Production costs tend to rise during the initial production phase due to the flush water production, but costs diminish as water production is reduced and the submersible electric pumps are replaced with standard beam pumps.
One reason the economics are attractive other than the high reserves and high BTU content is the low development costs per well.
This rormation is a carbonate reservoir with extensive natural fracturing, which means the wells do not have to be fracture stimulated. This holds down well costs and provides a competitive advantage in Oklahoma in that there is no queue for frac crews. Another unique characteristic of the Hunton is that the horizontal laterals do not require any tubular pipe because the bores stand up on their own; thus there will be none of the typical expenses associated with casing wells in the Hunton.
Being one of the deeper formations of the Oklahoma oil and gas layer cake, lying beneath the Woodford Shale. For that reason, operators typically do not include the Hunton as part of the STACK play, but the Hunton certainly is prospective across much of the STACK fairway.
The Andrews-1 well, targeting the Hunton Limestone is due to be drilled in the next month or two and we have already seen groundworks commencing, suggesting that the ‘intent to drill’ that was submitted to the Oklahoma Corporation Commission on 8 February 2024 has been approved.
I look forward to updates in the very near future as there is only a ten-day drilling period to a depth of 5,200 feet and completion time is approximately eight days including perforating and flow-back if successful.
With a 75% chance of success and partnered with a company experienced in this area, Union Jack is entering an exciting new era in its history.
