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Already hot Anadarko Basin has more room to grow, may be home to next big shale

The Anadarko Basin of Oklahoma and Texas has thousands of unconventional oil and gas locations left to be tapped and may be home to biggest yet-to-be developed shale play in the country, according to a new report from IHS Markit.

Despite being a staple in American oil and gas for more than 60 years, decades of potential may exist in the Anadarko, the report said. The basin has already enjoyed a resurgence due to the increased interest in the SCOOP and STACK plays, but IHS estimated that approximately 16 billion barrels of oil and more than 200 Tcf of gas in un-risked technically recovered resources are still in the basin.

"The Anadarko Basin has long been a major contributor to U.S. production, but it is just getting started in terms of delivering on its unconventional production potential," said John Roberts, executive director, global subsurface operations. "We are now witnessing a new kind of Oklahoma land rush."

The U.S. Energy Information Administration anticipates January production from the Anadarko Basin will reach nearly 600,000 bbl/d of oil and more than 7.6 Bcf/d of natural gas, both all-time highs. Those production totals could continue to go upward, as IHS estimates that about only 20% of the STACK's "sweet-spot" locations have been drilled or developed.

"The play is still in its early stages of unconventional development. We can easily envision an additional 4,000 to 5,000 horizontal wells drilled," Roberts said.

A large source of production in the basin may still be waiting to be tapped: the Simpson Shale. The Simpson Shale has been exploited by vertical drilling for decades, but has been largely untouched by new unconventional methods. IHS believes that the Simpson is one of the largest yet-to-be developed shales in the country, which could push interest even higher when it is explored using horizontal drilling.

"The Anadarko is attractive because it has 41 stacked plays, which overlap in many parts of the basin," said Prithiraj Chungkham, who co-authored the study with Roberts. "For operators, that means multiple targets that can be accessed from one well pad."