Mississippian a Symphony, Not a Solo

By DAVID BROWN, EXPLORER Correspondent

In the mid-continent Mississippi Lime, it’s the same song and a totally new verse – with a challenging geological chorus.

Horizontal drilling has orchestrated a booming new oil and gas play in northern Oklahoma and southern Kansas, keyed to the presence of chert, tripolite, dolomite and vertical fractures.

Operators drilled oil wells in this area for decades, thousands of them, with hit-and-miss success.

Using a combination of horizontal drilling and hydraulic fracturing, they now bring in wells with hundreds of barrels of oil equivalent (Boe) production per day – and per-well estimated ultimate recovery up to 400,000 barrels.

And those wells can cost less than $2.5 million each.

This new play is a tune of rocks and water.

First Notes of Understanding

For a heavily drilled area, the Mid-Continent Mississippian was surprisingly little understood – or even misunderstood.

AAPG member Salvatore Mazzullo, a professor of geology at Wichita State University and a three-time winner of the A.I. Levorsen Award, started a project in 2009 to study the Mississippian Cowley Formation.

“We could figure out the Cowley – we had cores, but we couldn’t figure out where it fit in the Mississippian,” Mazzullo said.

“So we went to the outcrop. The first day, we realized these rocks are exactly like the cores we see in the subsurface. Not just similar, but exactly alike,” he said.

AAPG member Charles Wickstrom is managing member of Spyglass Energy Group in Tulsa, a player in the Mississippi Lime.

“You can take what we see in the outcrops in this tri-state area (of Missouri, Arkansas and Oklahoma) and just take it directly to the subsurface,” he said.

The Tulsa Geological Society sponsored a three-day field trip to study the outcrops in April. Saying industry interest in the Mississippian runs high would be an understatement.

“We had the field trip planned for one bus with 43 people. It sold out within an hour of the announcement,” Wickstrom said, which caused an expansion to accommodate more than 90 people.

In his studies, Mazzullo found that the accepted depositional model for the mid-continent Mississippian didn’t match up with the reality he was seeing.

“We realized these units weren’t doing what they were supposed to be doing in the model,” he said.

For instance, the model says the Mississippian rocks deepen to the south, but they actually shallow to the south because of tectonic activity, he noted.

Recognition and understanding of the unconformities in the Mississippian are essential, Mazzullo said. Some are eustatic, some tectonic.

“If it’s a tectonic unconformity and you’re looking updip for a reservoir, it’s not going to be there” he said.

In Missouri, the Mississippian outcrops can be found to about 40 miles east of Springfield. They extend south past Harrison in Arkansas and to Tahlequah in Oklahoma, Mazzullo said.

From there the characteristic Mid-Continent Mississippian rocks, up to 400 feet in total thickness, extend 300 miles to the west.

“These rocks have been there for a long time, but people haven’t been able to put it all together,” Mazzullo said.

When he looks at the Mississippian rocks, “they’re telling us, we’ve been looking at the wrong things,” he noted. “We’ve been looking at it in the wrong way.”

Complex Structure

Starting with knowledge of the subsurface was key, according to Mazzullo. That allowed close analysis of the outcrops.

He identified three distinct formations in the Osagian Mississippian, with different members and characteristics: the Burlington-Keokuk, Reeds Spring and Pierson.

The Pierson Formation contains reefs and has dolomite updip, presenting two reservoir objectives, Mazzullo said.

The Reeds Spring is a series of prograding wedges and has tripolite at the top, he noted. It also may contain multiple reservoir objectives. The Cowley is a facies of the Reeds Spring.

Care is needed because “it doesn’t suffice to say ‘Reeds Spring.’ You have to identify which wedge,” he observed.

“Our work on the outcrops has defined clear reservoir objectives within the Mississippian. It used to be you just drilled into the Mississippian,” Mazzullo said.

“Everybody went under the mistaken impression, it’s just the Miss. Well, it’s not just the Miss.

“You need to know which particular reservoir section you’re in. And you have to do sample work,” he added.

Going Out

In a series of papers, Mazzullo and co-author and AAPG member Brian Wilhite have tried to refine the nomenclature used for the Mid-Continent Mississippian, right down to the types of rocks present.

They distinguish among:

• Chert, which is SiO2, and readily identified by geologists.
• Tripolite, which is chert of any age that has been highly weathered by meteoric fluids, and is light-weight because of high microporosity formed during subaerial exposure.
• Spiculate, which is fine-grained rock composed of the siliceous spicules of invertebrates.
• Chat, which, according to the authors, is an informal, local term that does not denote any specific lithology. They suggest it not be used.

(Some mid-continent operators, however, refer to the new play as the “Mississippi chat play” and identify tripolitic or weathered chert as chat.)

Defining and identifying these rocks has helped Mazzullo identify the characteristics of different Mississippian formations. The Reeds Springs contains very cherty limestones in which spicules have not yet been found.

Wickstrom said the Mississippian often was logged without noting the distinctions among formations.

“Many well site geologists, when they got to the top of the Mississippian, may or may not have looked at the samples,” he said.

Closely defining those characteristics has helped to identify reservoir objectives, even beyond the most frequently targeted zones.

Mazzullo said the lowermost, Kinderhookian part of the Mississippian includes the Compton-Northview sections. The Compton Lime contains reefs that are locally oil-stained and deserves more study, he noted.

In the area being developed by Spyglass Energy, a productive weathered chert layer of lower porosity exists under the target Reeds Spring zone, Wickstrom said. Horizontal drilling also can open up the potential of that type of secondary target.

“I see this eventually being drilled with mutiple laterals in the Mississippian,” he said.

Unconventional Approach

Shane Matson, Spyglass Energy geologist in Tulsa, said he began searching for possibilities in the Mississippian tripolite chert in 2003.

“We weren’t paying too much attention to the other 250 feet of the formation, mostly because the logs were so confusing,” he said.

A breakthrough came in 2009, when the company obtained its first image logs in the formation, he recalled. Matson and Wickstrom were able to correlate what they saw with outcrops in the Ozarks, and now routinely run image logs on their wells.

This new Mississippian play has been called an application of horizontal drilling and fracking to a conventional reservoir. But Matson said he considers it an unconventional play because the geology is outside conventional boundaries.

“One of the challenges people have in this play is evaluating it on traditional neutron porosity logs. The porosity profile is complex,” he said.

Even the operators drilling successful wells don’t always understand the nature of the formations they’re drilling, Matson noted.

“There are multiple facies people are exploiting and much of the time, probably, they don’t don’t know which facies they are exploiting,” he said.

Wells in the Mississippian play typically produce a lot of water. And that’s something operators don’t mind in this play.

“The more water/fluids you’re getting, the more oil you’re producing,” Wickstrom observed.

Coping with the water does take planning, and Wickstrom said a development project starts with drilling an injection well to the bottom of the Arbuckle. That can handle the water from up to eight development wells, he said.

Today, the long-time Mississippian play in Kansas and Oklahoma is back big time. Exploration that was hit-and-miss is now hit-and-produce.

“The fractures were vertical and it just depended on whether you were lucky enough to get in the fractures,” Wickstrom said. “It’s ideal for a horizontal play.”

For Mid-Continent players, that’s music to their ears.

Peter Hristov reported on in Hot Stocks Jan 4, 2012

Superior Oil and Gas Co. (PINK:SIOR, SIOR message board) has been steaming in the last couple of days as both volume and price surged up on the chart. SIOR was moving in a trading range around $0.008 during most of December. However, at the end of the month and more specifically on Dec. 29 the stock broke the upper border of the range and spiked up in the high volume area. Since then the trading activity with SIOR stock significantly increased. Yesterday, the number of exchanged shares was near 7.3 million which is several times higher than the daily average. The stock price continued rising and at the end of the session SIOR had risen 32% to $0.0199. Trending technical indicators also turned positive after the break out. The MACD shot up and the short term moving averages  bolstered the up move with a bullish cross which was drown on Dec. 27. However, SIOR is a limited information pink sheet company and as such it is not obliged to publish current information. There has been no official publications in the public media to give a clue to the recent development of SIOR stock. In this train of thoughts investors in SIOR stock will have to rely on their intuition for guidance in their investment strategy.

By Tulsa World Staff and Wire Reports

Published: 12/29/2011 2:20 AM

International oil and gas players are diving into the growing Mississippian play of northern Oklahoma and southern Kansas.

Oklahoma City-based Sand Ridge Energy Inc. is selling drilling rights to 363,636 acres in the Mississippian to Spanish company Repsol YPF. SandRidge said it will receive $250 million in cash and $750 million obligated toward drilling development that the company hopes to satisfy in three years.

“We are excited to announce this joint venture with Repsol, a global energy leader, and we are pleased that they share our confidence in the development potential of this vast Mississippian oil play,” SandRidge CEO Tom Ward said in a statement. “We compare the scope of this play to the Bakken and believe it will be transformational for the Mid-Continent region of the United States.”

The joint venture excludes all wells and acreage in the covered area drilled before Jan. 1 and all wells and acreage associated with SandRidge Mississippian Trust I.

The transaction is expected to close in the first quarter, subject to closing conditions.

The Mississippian lime formation has attracted oil and gas explorers to once abandoned fields now made oil-rich properties through horizontal drilling. Sand Ridge helped lead the way, drilling 195 horizontal wells – nearly half of those drilled in the play so far, according to reports.

Tulsa-based Eagle Energy also has extensive holdings in the Mississippian, producing 4,000 barrels of oil equivalent per day as of September. Chesapeake Energy Corp. and Devon and Energy Corp., both based in Oklahoma City, also are investing in the Mississippian region.

“I think it’s probably the hottest play going in the country,” Eagle CEO Steve Antry told the Tulsa World in September.

RAM Resources Inc., a Tulsa-based producer, is exploring wells within a Mississippi chat formation in Osage County. Longtime Houston oilman Floyd Wilson, who is leading a $550 million recapitalization of RAM, wants to focus much of the company’s energies in that formation.

Wildcatters are drawn to the oil-rich mixture in the mature fields of the Mississippian. Some estimate production there at 50 percent to 52 percent oil.

SandRidge will sell Repsol an approximately 25 percent non-operated working interest in its Mississippian extension in western Kansas and a 16 percent non-operated working interest in its original play.

OKLAHOMA CITY, Dec. 22, 2011 /PRNewswire/ — SandRidge Energy, Inc. (“SandRidge”) (NYSE: SD) announced today that it has entered into a Joint Venture (“JV”) with a subsidiary of Repsol YPF, S.A., a leading international energy company based in Madrid, Spain. Under the agreement, SandRidge will sell an approximate 25% non-operated working interest, or 250,000 net acres, in the Extension Mississippian play located in Western Kansas and an approximate 16% non-operated working interest, or 113,636 net acres, in its Original Mississippian play.

The 363,636 net acres in total will be sold to Repsol for an aggregate transaction value of $1 Billion. Repsol will pay $250 million in cash at closing and the remainder in the form of a drilling carry. In addition to paying for its working interest share of development costs, Repsol will pay an amount equal to 200% of its working interest to fund a portion of SandRidge’s cost of development until the additional $750 million drilling carry obligation is satisfied. Based on current drilling expectations, SandRidge anticipates the drilling carry obligation to be satisfied within three years. The JV will exclude all wells and acreage within the associated spacing units spudded prior to January 1, 2012 and all wells and acreage associated with SandRidge Mississippian Trust I. The transaction is expected to close in the first quarter and is subject to certain closing conditions.

Tom Ward, Chairman and CEO, stated, “We are excited to announce this Joint Venture with Repsol, a global energy leader, and we are pleased that they share our confidence in the development potential of this vast Mississippian oil play. We compare the scope of this play to the Bakken and believe it will be transformational for the Mid-Continent region of the United States. SandRidge has led the way in developing the Mississippian Play and has now drilled more than 195 horizontal wells, representing nearly half of all the horizontal wells drilled in the play to date. As a result of the drilling carry and its lower working interest, SandRidge’s 2012 CapEx is expected to decline to $1.6 Billion from a previous budget of $1.8 Billion. This JV with Repsol puts us on a clear path to bridge the 2012 funding gap with non-debt capital and to execute our three year plan to triple EBITDA and double oil production while lowering our debt to EBITDA ratio.

By Wendy Koch, USA TODAY

Looking at your heating bills or gas prices, you may find it surprising that the United States is enjoying a mini oil boom. It’s producing more crude oil and, for the first time in decades, has become a net exporter of petroleum products such as jet fuel, heating oil and gasoline.

The U.S. exported more oil-based fuels than it imported in the first nine months of this year, making it likely that 2011 will be the first time since 1949 that the nation is a net exporter of such goods, primarily diesel.

That’s not all. The U.S. has reversed another decades-long trend. It began producing more crude oil in 2008 than the year before and accelerated that upswing 3% in the first nine months of this year compared with the same period in 2010. That production has helped reduce U.S. imports of crude oil by about 10% since 2006.

“It’s dramatic. It’s transformative,” Edward Morse, a former senior U.S. energy official who now directs global commodities research at Citigroup, says of the historic shifts. He says the U.S. is importing a smaller share — 49% in 2010, down from 60% in 2005 — of the oil it uses, adding: “We’re moving toward energy independence.”

He says the U.S. economy benefits, because its low natural gas prices help make its steel and other manufacturing industries more competitive. He says U.S. consumers benefit with more jobs and gasoline prices that are lower and less volatile than in many countries.

Not all are cheering. The changes are exacting a brutal toll on the nation’s health and environment, says Susan Casey-Lefkowitz of the Natural Resources Defense Council (NRDC), citing the greenhouse gas emissions of producing and refining fossil fuels.

The U.S., the world’s second-largest greenhouse gas emitter after China, produced 4% more carbon dioxide last year than in 2009, when emissions dipped because of the recession, according to the Global Carbon Project, an international group of scientists.

American consumers benefit little from the U.S. oil boomlet, because their fuel prices depend heavily on a global oil market that remains tight and has probably already peaked in production, says Jeremy Rifkin, author of The Third Industrial Revolution: How Lateral Power is Transforming Energy, the Economy and the World.

Perhaps the bigger impact is on American foreign policy. The U.S. oil boomlet has amplified concurrent shifts in the global oil market. Today, half of net U.S. petroleum imports come from the Western Hemisphere, and half of that (or a quarter of the total) comes from Canada. Only 12% came from Saudi Arabia last year, down from nearly 19% in 1993.

“What’s occurring is a rebalancing of the world oil supply,” says Daniel Yergin, energy historian and author of The Quest: Energy, Security, and the Remaking of the Modern World. He says Brazil’s newly produced offshore oil, which he calls “presalt” because it’s beneath a thick layer of salt, will further tip the scales.

“The importance of the Middle East has decreased for us,” says Michael Klare, author of the forthcoming The Race for What’s Left: The Global Scramble for the World’s Last Resources. “That’s a dramatic change in the geopolitical equation.”

Why the U.S. shifts?

What’s driving the boomlet is increased production of two resources that previously weren’t considered economically viable to develop.

“It’s a double-barreled development, pardon the pun,” says Martin Tallett, president of EnSys Energy, a Massachusetts-based oil industry consulting firm. He did a study for the Department of Energy on the proposed $7 billion Keystone pipeline, which would carry oil or tar sands from Canada through six U.S. states to the Gulf Coast.

This heavy crude — a mixture of sand, water, clay and a viscous oil known as bitumen — is found primarily in Canada’s Alberta province. It’s increasingly being exported to the U.S., where it’s refined into petroleum products, many for export. Its production surpassed 1.1 million barrels per day in 2005 and is expected to nearly triple by 2015, according to Canada’s National Energy Board.

The other resource is sometimes called “shale oil” but more accurately “tight oil,” because it comes from shale and other rock formations. (It’s different from “oil shale,” which contains the oil precursor kerogen but remains costly to develop.)

Tight oil, produced mostly from the Bakken shale formation in North Dakota and Montana and the Eagle Ford one in Texas, is extracted in much the same way as natural gas — pumping pressurized water, sand and chemicals underground to fracture the rock and break loose the oil so it can flow to the surface. This process is often called “fracking.”

“It’s the new, new thing,” Yergin, the energy historian, says of tight oil. He says its U.S. production could skyrocket to 2.9 million barrels per day by 2020. North Dakota, which accounts for the vast majority of this oil, produced 488,066 barrels per day in October 2011, up from 90,196 in January 2005, according to the state’s Department of Mineral Resources.

“When shale gas worked, people said, ‘Maybe this works for oil, too,’ ” Yergin says, noting that oil brings a higher return than natural gas. The result? A surge in production within the last two years. Yergin says this has produced needed jobs in an overall weak U.S. economy and, by expanding the global oil supply, has helped prevent or offset price spikes.

Tallett says the U.S. has been able to capitalize on that production because it has a flexible and efficient refinery network.

“We have some of the better refineries in the world — certainly the most complex,” he says, adding they can handle different types of crude oil and shift their product line quickly to meet demand. He says they’ve upped production of diesel fuel, which is in great demand worldwide, and reduced that for gasoline, now in surplus.

Other factors contributing to the U.S. net export of petroleum products is the federally mandated use of ethanol, which has boosted its production and reduced demand for regular gasoline.

Gasoline demand is also down because Americans are driving less. They’ve been driving fewer miles every month since March, according to a USA TODAY analysis of data from the Federal Highway Administration.

Simply put, “The U.S. has been using less and producing more,” says James Hamilton, an economics professor at the University of California-San Diego.

Environmentalists are concerned that the higher production of these unconventional, harder-to-reach oil resources carries increased dangers for air and water quality.

The NRDC’s Casey-Lefkowitz says the development of tar sands produces more greenhouse gas emissions than that of regular crude oil, and if spilled, the heavy crude can be more difficult to clean up because of its viscosity. She says its production has taken off without regard to safety.

“My fear is that the same is happening with tight oil deposits,” she says. “Whenever you fracture shale to get at oil,” she says, “you’re flaring off methane.” The process wastes natural gas and uses huge volumes of water.

On Dec. 8, the U.S. Environmental Protection Agency said fracking might cause groundwater pollution. It said compounds likely associated with fracking chemicals had been detected in the groundwater beneath Pavillion, in central Wyoming.

A temporary boost?

Rifkin says the production of unconventional oil resources may provide a temporary boost, but it won’t last — in the U.S. or worldwide. Citing a 2010 report by the International Energy Agency, a Paris-based organization, he says global peak production of crude oil probably occurred in 2006.

“We’re now in the early stages of a volatile end game,” he says, especially as China and India continue to develop and increase their energy consumption. “There’s no easy way to drill our way out of this.”

Rifkin, author and policy advocate, says the U.S. should move quickly to what he calls the “third industrial revolution,” based on renewable energy, micro power plants and electric vehicles. He says he’s discussed this approach with German Chancellor Angela Merkel, who he says supports it.

Yergin argues there’s no clear limit to the world’s oil resources as innovation has found ways to develop what once was considered undevelopable. Still, with global energy demand increasing and the climate warming, he sees benefits in energy efficiency and renewable energy.

Hamilton, the economics professor, says that the U.S. oil boomlet has reversed a historic decline in production, but that the nation won’t ever go back to producing as much oil as in the 1970s or consuming as little as it did then.

“We’re still importing a huge amount of crude oil,” Hamilton says, and neither he nor the U.S. government expects that will change anytime soon.

“North Dakota’s production, though growing, is still small compared to what we got out of Alaska,” he says. “It doesn’t change the long-term challenges or end the overall U.S. petroleum trade deficit.”

By ROD WALTON World Staff Writer
Published: 12/2/2011 1:41 AM
Last Modified: 12/2/2011 5:23 AM

Steve Antry is chairman and CEO of Tulsa-based Eagle Energy Co. of Oklahoma LLC. Before founding Eagle in 2009, he was founder, chairman and CEO of Beta Oil & Gas Inc. In 2004, Antry helped merge Beta with Houston-based PetroHawk Energy LLC. He holds an MBA with an emphasis in finance from Texas Christian University.

1. Eagle is already one of the bigger players in the Mississippian formation of northern Oklahoma, with more than 75,000 acres in leases. What was so attractive that prompted you to bet big on a relatively new horizontal play in only two years?

I minimized our risk by buying a solid property that was steadily producing from another productive zone. We gradually risked about $5 million in capital to test our thesis in the Mississippian, with the blessing of Riverstone Holdings, our New York-based private equity backers. It was an attractive bet, considering the risk-reward ratio.

We were also able to quickly increase our acreage position by another 50 percent before the word really got out on the magnitude of the Mississippi. We knew exactly what kind of deal we were making on those last 25,000 acres. There was no material risk to bet on those.

2. Tell us a little more about Eagle’s other production efforts. Do you handle drilling operations or contract that out?

We’re the named operator of virtually 100 percent of the properties that we drill and produce oil and gas from. However, we do use subcontractors for related services such as conventional drilling, directional drilling, fracking and well-servicing.

3. Some have called this new domestic drilling effort a “revolution.” Oil and gas history shows plenty of manias that tapped out after a while. How long can the limestone and shale plays hold potential for strong production?

Still early stage, the Mississippi trend is now well established with over 500 horizontal-well data points. Ultimately there will be thousands of additional wells drilled. Eagle alone has 500 more locations already identified. Thus, the potential for strong production for a long time in the Mississippi is undisputable. Everyone that has significant acreage in the core Mississippi trend is in a heavy growth phase right now.

On a grander scale, horizontal drilling and large multistage fracking has clearly opened up a lot of new production around the country in the shales.

In the Mississippi trend, we’re just applying that same technology to carbonate reservoirs (limestones) that have much more permeability (several hundred times more permeability than in a shale). Now that the technology is working so well in Oklahoma, the same technology is being tested in other carbonate reservoirs in other states to potentially open up those areas.

4. Before starting Eagle, you founded and led Beta Oil and Gas, selling that to PetroHawk several years ago. What long-term plans do you have for Eagle?

I’ve mentioned our 500 additional identified locations. They alone would provide for five to 10 years of heavy drilling activity for us. And our well performance continues to improve.

Our backers, Riverstone Holdings, are very supportive of management just continuing to increase the value of the company through the drill bit. And I love our current team. I enjoy going to work every day.

That said, the numbers are attracting large potential buyers.

5. U.S. oil seems to be everywhere again, like it’s 1900 all over again. What are the pitfalls or challenges to new companies wanting to strike it rich?

Oil and gas will always be risky to a certain extent. The risk and reward will always be tied, to a certain degree, to timing and commodity prices and all the other well-known industry risks.

Specific to 2011, I would say the biggest obstacle to new entrants that hasn’t always been present is that for even those with a positive track record, it has become increasingly difficult to attract small amounts of capital.

What’s attracting the big money are the bigger resource plays. There are good smaller quality plays out there, but they’re having a hard time attracting capital.

By ROD WALTON World Staff Writer

In their Q3 2011 conference call, SandRidge Energy’s CEO discusses the Mississippi play, below are some quotes:

“We believe the Mississippian is the most capital-efficient play in the U.S.”

“At the same time, our Mississippian production has performed above our expectations”

“The Mississippian oil production is in line with our type curve, and our natural gas production is better than we anticipated”

You can read the entire transcript to Sandridge Energy’s 3rd Quarter 2011 conference call Here

Oil and Gas 360 reports that recent deals in the Mississippi Lime have been going for upwards of $4,000 per acre. In August 2011, SandRidge Energy (NYSE: SD) entered into a JV with an affiliate of Atinum Partners Co in which Antium paid $4,425 per acre for a 13.2% non-operated WI in SD’s 860,000 acres.  Companies such as Range Resources (NYSE: RRC) and SandRidge Energy own acreage positions near PQ’s recently acquired acreage in Pawnee County, Oklahoma, as well as PQ’s acreage in Grant County, Oklahoma and Sumner County, Kansas. Both Range Resources and SandRidge have reported EURs on their acreage between approximately 400,000 and 500,000 BOE EURs with well costs of approximately $3.0 million per well.

Industry Moving Quickly On Mississippian Resource Play
Posted: Nov 16, 2011 09:10 AM by Eric Fox in Investopedia

The exploration and production industry is accelerating the development of various Mississippian horizontal plays in Oklahoma and Kansas, as it seeks to fulfill the popular goal of increasing production composed of crude oil and natural gas liquids.

The Players
One company making a huge bet, here, is SandRidge Energy (NYSE:SD), which has 800,000 net acres under lease prospective for this resource play. The company has also leased up 700,000 additional acres, and is targeting additional Mississippian plays.

SandRidge drilled 47 wells across Kansas and Oklahoma, during the third quarter of 2011, increasing the company’s total operated well count to 108 for the year. The company claims to have drilled nearly half of all the industry’s horizontal wells targeting the Mississippian.

The company is operating 20 rigs to develop its average, and plans to increase that to an average of 26 in 2012. The company also plans to shift some capital away from its operations in the Permian Basin, and has allocated 57% of its $1.8 billion capital budget to the Mississippian.

Range Resources (NYSE:RRC) has steadily increased the company’s exposure to this play during 2011, moving from 15,000 net acres, at the beginning of the year, to 105,000 net acres as of October 2011.

The company is currently focused on its properties in northern Oklahoma, where it estimates that the formation produces mostly oil and natural gas liquids.

Range Resources favors this development because the economics of wells, here, are superior to many other onshore resource plays, including some in the Permian Basin that are being targeted by competitors.

It has drilled and completed eight horizontal wells, to date, in northern Oklahoma, and estimates that these wells will have an estimated ultimate recovery (EUR) of 485,000 barrels of oil equivalent (BOE), each. The company estimates minimum returns of 60% from Mississippian wells.

Other Operators
Devon Energy (NYSE:DVN) is working in the Mississippian along with several other exploratory plays in the company’s new venture group. Devon Energy has approximately 210,000 net acres under lease, and plans to drill between 12 -15 wells in 2011.

PetroQuest Energy (NYSE:PQ) is at a much earlier stage of development of the Mississippian, and has leased up 28,000 net acres in the play. The company plans to start drilling its first operated well by the end of 2011.

Another early stage player is Unit Corporation (NYSE:UNT), which is focused on the Mississippian in southern Kansas. The company has 45,000 net acres prospective for this play, and plans to drill the first well in the first quarter of 2012.

The Bottom Line
The industry seems to find oil and natural gas just about everywhere in the onshore United States, contradicting the conventional wisdom that permeates the market regarding the mature nature of domestic oil and gas assets. Whether these discoveries will be able to make a difference in a global market is the real issue that investors should consider.