The Oklahoma STACK Play
The STACK play in Oklahoma has caught the world’s attention and some of the largest energy companies looking for investors. However, individual investors have the opportunity to invest in oil and gas as well. Oil plays have been getting a lot of attention, especially the Bakken Formation, and Permian Basin. Now the less popular STACK Oil and Gas Play is slowly gaining recognition. STACK Play is situated in Anadarko Basin, Oklahoma. Its sister plays are SCOOP and CANA WOODFORD, also in Oklahoma. STACK Play stands for Sooner Trend Anadarko basin Canadian and Kingfisher. The name was derived from a geographic area and not a geological formation.
Oil and gas plays are economical, and the STACK play which is emerging fast started showing an economic promise in early 2016. Experts have observed the growth of STACK play and seen its potential. According to NYSE: IHS, which is the leading source of critical information and insight, STACK play garnered attention from operators, investors, and service companies. The analysis from IHS shows that STACK play has economic viability of oil prices less than $45 per barrel.
Factors such as lower costs have also lured investors, not to mention a hydrocarbon friendly environment in Oklahoma. Oil and gas producers such as ExxonMobil Corp., Jericho Oil Corp., and Alta Meta Resources Inc. have also shown their interest. The oil fields in Permian Basin have a constrained distribution capacity, unlike the STACK, and that gives the STACK play an upper hand. According to one of the investors, Ryan Wright, who is Tree Capital Ventures’ CEO, the wells in STACK play cost less and perform better than other developments, and the expenses for operating, transportation, as well as production tax have been lower. The investors get paid the full WTI spot price and sometimes receive a BTU bonus for the oil and gas produced.
Tremendous Opportunity for Long-term RO
Quality oil and gas investments may provide investors a passive income for decades. High rates of return and improvements in technology and developmental drilling have lowered the risks. STACK play doesn’t only enable investors to earn a passive income but also a strong return on investment. Most sophisticated and accredited investors benefit from the income tax shelter and the ongoing returns.
West Texas and New Mexico based Permian Basin is probably the most lucrative oil and gas producer, and investors always want to have a piece of it. STACK play is the second-most-active play just after Permian, and you guessed it right, investors are also rushing to cash in on it as well. The reason why investors are scrambling to the STACK play is its desirable location and potential for strong ROI even when oil prices are lower. That’s the reason STACK play has been recording an increase in oil production while other drilling areas have witnessed a decrease during seasons of low oil prices.
The oil reserves that constitute the STACK play have a sheer concentration of oil, and when they are tapped, the reserves produce more oil than other sites and cheaper than what it would have cost to create the same amount of oil and gas in different wells. Oil companies and investors are attracted to reserves that continue to provide oil even after the prices fall to reduce their risk and also maximize their ROI. STACK play is one of them. The oil from STACK play can also be transported easily, is easily accessible, and its taxed low and that helps both sophisticated and accredited investors achieve a higher ROI over the long-term.
How Smaller Investors Can Participate
The Oklahoma STACK play is the future, and it couldn’t be where it is if it were not for investors who took the risk. First of all, there are four types of oil and gas investments that you need to know. They are:
It’s up to the investors to decide which investment they would like to take, or they can have the companies they invest through decide. The most recommended way smaller investors can invest in oil and gas is through partnerships with other qualified investors. Some are using a limited partnership which has a lot of potential for decent and stable cash flow, fantastic capital gains, and high yields.
This is the most specialized field of investing, and you will be engaging your broker who is an expert in this industry. You can also deal with a company’s management directly to get a private placement opportunity. Investing in STACK play offers a lot of advantages and benefits such as profit potential and tax advantages.
The Major and Minor Players
Some of the significant oil and gas investors and players are Deloitte, Fig Tree Capital Ventures, LLC, and our company, United Exploration LLC. So, who are we?
United Exploration, LLC is Texas-based independent oil and gas company that participates in drilling and development of approved oil and gas fields such as the Oklahoma STACK play, to generate a long-term income. Our management team has played roles in developing over 150 wells in North Dakota and Texas Gulf Coast.
As one of the major players in the oil and gas industry, we value our partners, and we believe that the partnership should benefit all investors. Please contact us if you have an interest in the Oklahoma STACK play and you are looking for an oil and gas company that is experienced, has top-notch drilling prospects, and friendly to do business with, we are just a call away.
The Oklahoma STACK Play
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