Sandridge and Spanish company, Repsol, invests heavily to explore Mississippi Lime Oil Play
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.
