Operations

Chaparral Energy

Unlocking the Mid-Continent

Our oil and gas E&P efforts are focused solely in the Mid-Continent — specifically in Oklahoma, the Texas Panhandle and Southwest Kansas.

In these areas, we leverage our expertise in the most advanced completion techniques to unlock significant reserves from conventional and unconventional reservoirs where we have rights under more than 425,000 net surface acres. The majority of our horizontal drilling efforts focus on our unconventional reservoirs, including the Meramec, Oswego, Woodford, Mississippi Lime and Marmaton — many of these plays are aligned, offering stacked-pay drilling opportunities.

At the same time, we are also reenergizing older fields that have already experienced multiple cycles of oil recovery through primary, secondary and tertiary techniques. We’re breathing new life into these formations through next-generation enhanced oil recovery (EOR) techniques, by injecting carbon dioxide (CO2) that would otherwise be released into the atmosphere to energize and recover more of the oil trapped in the reservoir than ever before. This investment provides us with a stable, long-term cash flow that helps fund our capital program and offsets our higher decline drilling and completion operations.

Operational Highlights

  • Third-largest oil producer in Oklahoma
  • Third-largest EOR operator in the U.S. in terms of the number of active projects
  • Oil-rich portfolio with focus on high-return, oil-leveraged plays 
  • More than 425,000 net surface acres in the Mid-Continent, much of which includes stacked-pay opportunities
  • Significant inventory of repeatable drilling opportunities with almost 8,400 gross unrisked horizontal drilling locations

Oil-rich Production

Chaparral is unlocking limitless opportunities in our own backyard. Our significant Mid-Continent positions coupled with our extensive EOR program provides us with a unquie and balanced portfolio of immediate and longer-term development opportunities. 

 

Stacked Plays That Pay Off

The Mid-Continent is also home to several oil and gas formations that sit atop one another, sometimes hundreds to even thousands of vertical feet apart, creating overlapping layers known as “stacked pays.” Stacked pays allow access to drill multiple formations. This provides excellent cost efficiencies, improved oil and gas recoveries and an overall smaller surface footprint because we can operate multiple wells from a single location instead of a one-well-per-location basis.

Chaparral has more than 110,000 net surface acres with stacked-pay potential in the Woodford, Osage, Meramec, Oswego and Hunton.

Exploration & Production

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An Unconventional Approach

The majority of our operations revolve around exploring for and developing oil and gas on our more than 500,000 net acre position in the Mid-Continent region of Oklahoma and the Texas Panhandle. Thanks to technological advancements in horizontal drilling and hydraulic fracturing techniques, we are targeting oil-rich regions with previously, vertically produced multiple stacked pay formations and unlocking millions of previously unrecoverable reserves within this historic and oil-rich region.

Producing these resources requires highly trained professionals with expert knowledge. Our employees have the experience to assess each play’s unique geologic and productive characteristics, and find innovative solutions to recover previously untapped oil and gas deposits.

The geographic area referred to as the STACK is located primarily below portions of Blaine, Canadian, Garfield, Kingfisher and Major counties in central Oklahoma. This area is home to multiple oil-rich reservoirs that are stacked vertically, including the Oswego, Meramec, Osage, Woodford and Hunton formations.  

This stacking of plays allows Chaparral to effectively recover oil and gas from multiple formations using pad drilling, well spacing techniques and other operational efficiencies, which result in significant cost savings and reduced environmental impacts.  

Key Facts:

  • *Net Acres: 219,000
  • Gross (Unrisked) Drilling Locations: Approximately 4,300
  • Potential Recovery: Approximately 435 MMBoe

*Acreage duplicated for stacked reservoirs. 

The Meramec interval of the Mississippian is an oil-saturated reservoir and an attractive horizontal target within the STACK. Located across Oklahoma’s Blaine, Canadian, Garfield and Kingfisher counties, it is currently being developed by Chaparral and several other operators in the STACK region. 

The Osage interval of the Mississippian is present beneath the Meramec and continues to also deliver positive results. 

Key Facts:

  • Net Acres in the STACK: 36,000
  • Gross (Unrisked) Drilling Locations in the STACK: Approximately 600
  • Potential Recovery in the STACK: Approximately 60 MMBoe

Chaparral has a significant leasehold position in the emerging Oswego Play. Historically a vertical target, horizontal drilling and hydraulic fracturing technologies are unlocking previously unrecovered reserves of this mid-Pennsylvania age carbonate play.

Our first horizontal Oswego well was drilled in 2013 and is expected to produce more than 1.5 million barrels of oil equivalent. We have since drilled or participated in 15 wells in the Oswego within the STACK region, with an initial 30-day production rate of almost 500 Boe/d, of which approximately 90 percent is oil. At vertical depths of 6,000 to 7,000 feet, the Oswego yields extremely attractive results.

Key Facts:

  • Net Acres in the STACK: Approximately 87,000
  • Gross (Unrisked) Drilling Locations in the STACK: Approximately 1,050
  • Potential Recovery in the STACK: Approximately 90 MMBoe

The Woodford Shale is a key hydrocarbon source for a majority of STACK reservoirs and is also itself a lucrative target. Underlying a vast portion of central Oklahoma, the Woodford stretches from the Kansas to Texas borders. Multiple production regions have defined the play including the Cana and Anadarko Shelf within the STACK, as well as the Scoop and Arkoma areas. The Woodford is one of the state’s most active and prolific formations.

Key Facts:

  • Net Acres in the STACK: 84,000
  • Gross (Unrisked) Drilling Locations in the STACK: Approximately 1,400
  • Potential Recovery in the STACK: Approximately 135 MMBoe

Chaparral has a significant position within the Miss Lime Play, which has been the company's primary area of focus for several years. The Miss Lime underlies most of Woods, Alfalfa, northern Garfield and Major counties where our position is mostly held by production. Similar to the Oswego, this highly diverse carbonate formation has seen extensive vertical development. Technological advancements, pad drilling, operating efficiencies and targeting improvements have unlocked previously inaccessible portions of this reservoir.

Key Facts:

  • Net Acres: 50,000
  • Gross (Unrisked) Drilling Locations: Approximately 575
  • Potential Recovery: Approximately 85 MMBoe

We are the largest operator in the Panhandle Marmaton Play, which is located in a five-county area stretching through the Oklahoma/Texas Panhandle. To date, Chaparral has drilled, operated or participated in more than 130 wells, giving us a substantial knowledge base as we develop our almost 90,000 net acre position.

Key Facts:

  • Net Acres: 86,500
  • Gross (Unrisked) Drilling Locations: 700
  • Potential Recovery: More than 60 MMBoe

Billions

of barrels still to go

The Oklahoma Geologic Survey estimates that there were more than 84 billion barrels of original oil in place in Oklahoma from conventional, historically producing oil reservoirs. Shale plays, consisting of low-permeability rock, add to this large inventory of trapped oil and gas that until recently was considered uneconomical.

In addition, a study funded by the Department of Energy in 2009 estimates that industry-wide in the Mid-Continent there is still upward of 10 billion barrels of oil equivalent that could be recovered through CO2 EOR extraction techniques.

Enhanced Oil Recovery

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A Growing Phase in the Life Cycle

Chaparral is the third-largest CO2 EOR producer by number of active projects in the country. It’s a process the U.S. Department of Energy credits with having “the potential to produce more than 60 billion barrels of oil." Not to mention by capturing and repurposing CO2, we are reducing the country’s overall greenhouse gas emissions as Chaparral uses 100 percent man-made CO2.

Key EOR Facts

  • 9 active/8 operated projects (third most in the U.S.)
  • Total resource potential of 213 MMBo
  • 9,365 Bo/d net average production in 2015
  • 20 percent increase in compounded annual growth rate (CAGR) from 1,488 Bo/d in 2011 to 4,283 Bo/d in Q3 2016

In traditional sandstone and carbonate plays, primary phase production relies on natural reservoir pressure, pumps and gravity, and only captures approximately 10 to 20 percent of the original oil in place (OOIP). Secondary phase production, where water or gas is injected immiscibly into the reservoir to increase pressure and push oil to production wells typically yields an additional 15 to 30 percent. This means approximately 50 to 75 percent of the field’s oil is being left behind after primary and secondary production phases.

Tertiary-phase recovery, also known as EOR, can capture an additional 8 to 20 percent of the OOIP by mixing it with an oil-miscible gas or liquid such as CO2. This swells the oil and effectively acts as a solvent, allowing the oil to move much more readily toward producing wells.

Our North Burbank Unit is Oklahoma’s largest EOR project and a world-class oil resource. It has an estimated OOIP of more than 824 MMBoe and is the single largest unitized field in the state.

Located in Osage County in the northeastern part of Oklahoma, COis injected into the field via a 68-mile pipeline that runs from Coffeyville, Kansas, where CO2 emissions that would otherwise be vented into the atmosphere are captured and transported to Burbank. Injection began in June 2013, with the unit making 1,300 Bo/d gross production. As of the end of teh first quarter of 2016, CO2 was being injected into 38 spereate patterns in the North Burbank resulting in a gross daily production of approximately 3,050 Bo/d.

Key Facts:

  • Q3 2016 Gross Production: 2,858 Bo/d
  • 2015 Gross Exit Rate Production: 2,770 Bo/d
  • OOIP: More than 824 MMBo

We have six separate CO2 EOR projects located in the Oklahoma/Texas Panhandle area — the Camrick, North Perryton, Booker and Farnsworth units. The Booker area units are actually made up of three smaller neighboring units in a single field.

We began CO2 injection in 2001 on our Camrick Unit, which is our oldest EOR asset. CO2 for these units is transported by pipeline from an Agrium fertilizer plant in Borger, Texas, and the Arkalon Ethanol Plant in Seward County, Kansas.

These projects continue to deliver steady, long-term production and solid investment returns. We are currently averaging a combined total of more than 4,900 Bo/d from these units. This production increased from an initial rate prior to CO2 injection of approximately 272 Bo/d.

Key Facts:

  • Q3 2016 Gross Production: 3,978 Bo/d
  • OOIP: More than 269 MMBoe
  • Potential Gross Peak Production: More than 5,300 Bo/d

Our Velma Hoxbar Unit in central Oklahoma is energized by CO2 captured from the Koch fertilizer plant near Enid, Oklahoma. The Hoxbar Unit began injection of CO2 in September 2010 and has seen a gross production rate climb from 15 Bo/d to more than 320 Bo/d in 2014 — a 21-fold increase in overall production.

Key Facts:

  • Q3 2016 Gross Production: 170 Bo/d
  • OOIP: More than 11 MMBo