The central Oklahoma Anadarko Basin might be held by a select few operators, but what a lucky bunch they are. Or give them credit for foresight. In this storm of weak commodity prices, economics in the Woodford, Scoop and Stack resource plays are holding up against the gale.

All oil plays compared, Heikkinen Energy Advisors puts the Cana/Scoop at the top economically, with a $30 breakeven price based on $50 oil and $3 gas. The Cana Woodford is the sole basin in the Baker Hughes rig count to show an increase in rigs year-over-year as of the end of August, with 40 rigs active now, vs. 34 in 2014. And that number is projected to increase.

Coming out of second-quarter reporting, operators in these central Oklahoma plays revealed why they are accelerating where others are pressing the brakes. Oil and Gas Investor surveyed recent results and strategies of select operators.

Newfield Exploration

Bucking the national trend, Newfield announced it would juice its 2015 capex with an extra $200 million in the second half, directed specifically toward its operations in the Anadarko Basin. The company recently added 20,000 acres in the region, and now holds 210,000 acres in the Stack play, centered in Kingfisher and Canadian counties, where it is pressured to drill ahead of lease expirations and desires to accelerate into full field development.

The Midcontinent holds its own on breakeven price comparisons.

“The Anadarko Basin is economically resilient and our returns are improving,” stated Lee Boothby, Newfield chairman, president and CEO, in the company’s second-quarter conference call. “By drilling an extra 15 wells in 2015, we will offset about $40 million of lease renewal expenses, and ensure that 100% of our acreage is HBP [held by production] by the end of next year.”

Global Hunter Securities estimates Newfield paid about $5,000 per acre for the 20,000 added via grassroots leasing, primarily in the Stack play. That compares with current acreage prices in the core Stack of some $20,000 to $25,000, GHS reported in early September.

Newfield published internal rates of return of 35% in the Stack, up from 30% compared with first-quarter numbers, and largely due to decreased well costs. Since, the company has ramped up with three additional rigs in the Stack, up from five in the second quarter.

To date, Newfield has drilled 46 extended-lateral Stack wells at 10,000 feet, with 70% targeting the Meramec Formation, the remainder in the Woodford. The most recent 17 averaged 891 boe/d over 30 days, and flowed 77% oil. Experiments with enhanced completions on 46 Stack wells are paying off as well, per Boothby.

“Tighter frack cluster spacing is generating significantly higher oil production and has now become our norm,” he said in the call. “Based on our 950,000-boe type curve and today’s lower cost, our wells are expected to pay out in just two years. …That’s the way to go in this play.”

Newfield currently spaces clusters 60 to 75 feet apart, down from 95 in prior designs. The company reported degradation at spacing as low as 50 feet.

Newfield has tested multiple zones in a 700-foot-thick pay column, including the Woodford and Upper and Lower Meramec. An additional two unnamed horizons in the Stack could be exploited, it said, but the company will focus its immediate attention on the Meramec, which has been “amazingly consistent” and holds “considerable inventory.”

Contrasting the Stack, Newfield’s 85,000 acres in the Scoop play are HBP and in full development mode with five rigs at work. Average 30-day rates for extended lateral Scoop wet gas wells are 1,451 boe/d and 1,131 boe/d for a Scoop oil well. Tudor, Pickering, Holt & Co. analysts bless the wet-gas Woodford program as Newfield’s most economic play in the Anadarko, breaking even at $30 to $35/bbl, assuming $4 gas and 40% NGL realizations.

Newfield debuted its first Springer shale extended-lateral well at 1,340 boe/d over 30 days, 85% oil. The results might be tempting, but as the play is HBP, the company is saving Springer as upside for 2016 or beyond.

Boothby projected a 45% growth in net production from the Anadarko Basin by year-end, with drilling plans through 2016 shifted to oil growth in the Stack play.

“With this increase in activity, we now expect that our fourth-quarter production from the Anadarko Basin will average about 71,000 boe/d net, and we expect to deliver strong and economic growth from Scoop and Stack in 2016.”

Cimarex Energy

Coming out of second-quarter earnings, Cimarex Energy was feeling bullish about its economics and planned to ramp from seven rigs companywide to 16 by first-quarter 2016, funded by a May equity raise. And while the budding Delaware Basin draws a lot of investor attention to its portfolio, nearly half of the capital allocated will be driven into its mid-Oklahoma assets.

The majority of Cimarex’s $190-million 2015 Midcontinent capex is going into its Cana Woodford program, where it holds 128,000 acres. Here, the Denver-based company is focused on infill development and continues to experiment with frack design.

An eight-well test of various completion designs in its Haley section flowed 10.3 MMcf/d on a 30-day average, Cimarex vice president of exploration John Lambuth said on the company conference call. Based on those results, Cimarex will use a 30-stage frack design and pump 2,600 to 3,200 pounds of sand per foot going forward.

Although the company likes one-mile laterals for testing, it has become “very comfortable” deploying two-mile laterals in its Delaware Basin program and will move toward the long-lateral development in its Woodford program “probably mid- to late next year,” he said. “As we look at Woodford long laterals, then those returns all of a sudden get to a point where we’re excited relative to a [Delaware] long lateral well.”

Receiving less capital but no less interesting is Cimarex’s Meramec play, a 115,000-acre prospect. Cimarex to date has drilled 10 Meramec wells with average 30-day IPs of 9.3 MMcfe on 5,000-foot laterals. Two additional 10,000-foot lateral wells were being completed.

Despite positive results, the Meramec is earmarked for only 5% of the current budget. “It’s going to slow down,” said Lambuth. “We feel comfortable where we have good rates of return from an individual well standpoint, but now we need to understand how to develop it.”

Cimarex is planning a stacked stagger pilot test combining the Woodford and Meramec intervals. “All of these are critical data points as we think about development of this potentially vast resource,” Lambuth said, with the Meramec likely increasing as part of a layered Woodford development program.

Continental Resources

Oklahoma City’s Continental Resources busted out of the second-quarter earnings-season shoot with a staggering well result announcement. Its very first Meramec test, part of the Stack play in Blaine County, gushed at 2,076 boe/d, 77% oil, and was put on production just six days prior to the revelation. The well was completed with 40 stages in a 9,711-foot lateral. In the conference call, president and COO Jack Stark said, “We are officially adding Stack to Continental’s portfolio of world-class assets.”

And while he acknowledged it was too soon to estimate ultimate recovery, “based on industrywide results, we anticipate the economics from Stack will compare favorably with our Bakken and Scoop assets,” he said.

Continental’s Stack play encompasses 136,400 acres defined as the base of the Woodford Shale to the top of the Meramec, a column of pay ranging from 700 to 1,200 feet thick, and buried 9,000 to 17,000 feet down. Fortuitously, 95% of Continental’s position is over-pressured, Stark said, “where we believe well-performance will be enhanced.”

Two more Stack wells have been drilled since, with five to six additional ones expected by year-end. One of Continental’s Scoop rigs will join the current Stack rig operating.

To the south, trending through Grady, Garvin and Stephens counties, the company continues to delineate its Scoop position in various depths and experiment with drill and complete techniques. Some 28% of Continental’s total production comes from this program in the Woodford condensate window, where IPs average 1,539 boe/d.

During the quarter, the company conducted a second dual-zone density pilot. The 10-well Honeycutt featured five wells each in the upper and lower Woodford zones. On average, the wells turned in IP rates of 2,734 boe/d (37% oil). Its first dual-zone pilot, the Poteet, flowed 2,774 boe/d.

“Approximately one-third of our 460,000 net acres of leasehold at Scoop is prospective for dual-zone development like this where the Woodford is greater than 250 feet thick,” noted Stark.

Not to be overlooked, the company completed five Springer wells overlying Woodford in the Scoop region, with an average 24-hour IP of 1,385 boe/d. Oil and Gas Investor magazine recognized Continental’s Springer Shale discovery as its 2014 Discovery of the Year. However, the company is deferring development of the Springer to another day.

“We hate to sell this prolific production into this low price environment,” Stark explained. “We don’t need to because we’re HBP’ing … the Springer through our Woodford drilling. When prices are more attractive, we can come in and develop this right out of the chute.”

But as Anadarko trends up, Bakken trends down in Continental’s portfolio, as the company is allowing production to decline in its signature play. “We’ve got a lot of higher-return projects in the south,” said Continental senior vice president of operations Gary Gould on the call. “I think … overall production in the Bakken will be dropping off over time for all operators.”

That should be a temporary strategy, Continental management said, as analysts questioned the gassier mix of the Scoop and Stack. “As oil prices recover, you’ll see a move back into the Bakken,” as well as into the oily Springer. reiterated CFO John Hart. “We’re still committed to being an oil company.”

Conference call comments were sourced from SeekingAlpha.com.