Meramec Formation (STACK)
Oklahoma's Stacked Pay Opportunity - Production Down 28% Since 2019
Location
Key Reservoir Properties
Meramecian Stage
Siliceous mudstone, siltstone, limestone
8,000 - 12,000 ft
400 ft
6-14%
42.0° API
3,300 acres
Executive Summary
The Meramec Formation is the primary target in Oklahoma's STACK play (Sooner Trend, Anadarko Basin, Canadian and Kingfisher Counties). Once heralded as a potential rival to the Permian, the STACK has experienced significant production decline since peaking in 2019.
Key facts:
- Production Decline: Oklahoma oil down 27.9% (167,000 b/d) from 2019
- Play Size: ~3,300 square miles—relatively small vs. Bakken or Eagle Ford
- M&A Activity: No upstream corporate transactions since Q3 2022
- Stacked Pay: Multiple zones (Meramec, Osage, Woodford) but spacing concerns
The STACK illustrates the challenges of smaller shale plays competing for capital against the dominant Permian Basin.
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Historical Background
Early History and Discovery
The STACK play emerged in the early 2010s as operators discovered the Meramec and underlying formations could be commercially developed using horizontal drilling and hydraulic fracturing.
STACK/Meramec Timeline
| 2012-2014 | STACK play emerges, initial Meramec horizontal development |
| 2015-2018 | Peak activity—major operators (Devon, Continental, Marathon) expand positions |
| 2019 | Peak Oklahoma production, STACK contributes significantly |
| 2020-2024 | Production decline—Oklahoma down 28% from peak |
| Q3 2022-Present | Zero upstream M&A transactions in SCOOP/STACK |
Production Decline
The STACK has experienced significant production decline:
- Oklahoma 2019 vs. 2023: Down 167,000 b/d (27.9% decline)
- April 2024 vs. May 2023: Additional 35,000 b/d decline
- Assessment: "Production in the Anadarko would likely not return to previous peak levels"
Consolidation Stalled
Unlike other major plays, the SCOOP/STACK has seen virtually no M&A activity:
"At a time when both upstream and midstream companies are undergoing significant consolidation, there has been virtually no M&A activity in the SCOOP/STACK. According to Shale Experts, there has not been a single upstream corporate transaction since Q3 of 2022." — Mercer Capital
Geological Characteristics
Reservoir Properties
The Meramec Formation is a Mississippian-age siliceous mudstone and siltstone that serves as the primary target in the STACK play.
Meramec/STACK Reservoir Properties
Stacked Pay Configuration
The STACK acronym references the stacked pay zones available:
- Meramec: Primary target, multiple benches
- Osage: Secondary target above Woodford
- Woodford Shale: Deeper organic-rich shale target
Well Spacing Concerns
Limited Play Size Creates Spacing Issues
"The SCOOP/STACK is a comparatively small play compared to the Bakken or Eagle Ford, with a fairway size of just 3,300 square miles. This limited size increases the likelihood that new wells will reduce production capacity for existing wells due to well spacing issues."
Drilling & Completion Economics
Estimated Well Costs (2024)
Current Operators
Major STACK operators include:
- Devon Energy: 3-rig program, DOW joint venture funded 8% production growth (2023)
- Gulfport Energy: ~212 MMcfe/d (~20% of company production from SCOOP)
- Continental Resources: Maintains Anadarko Basin position
Production Decline Characteristics
Steep Decline Rates
Like all tight oil plays, STACK wells experience dramatic decline:
- Year 1 Decline: 65-75% from initial production
- Basin-Level Decline: Oklahoma production down 28% since 2019
- Without continuous drilling, production collapses
Production Decline Analysis
The Shale Decline Reality
While industry headlines tout record production, the underlying data reveals a critical truth: shale wells experience dramatic production declines that require constant drilling just to maintain output. This creates a "treadmill" effect where massive capital expenditure is needed simply to prevent production collapse.
Industry Expert Analysis
"New wells drilled in 2023 may ultimately produce roughly half of what new wells from 2019 will ultimately produce. The industry is sacrificing future production to maximize short-term output."
— Art Berman, Petroleum Geologist (40+ years experience)The Lateral Length Paradox
Since 2014, the industry has nearly tripled average lateral lengths from 5,000 ft to 14,000+ ft. While this increases initial production rates, it also accelerates decline—effectively using "wider straws" to drain reservoirs faster.
Key Investment Considerations
Decline Risks
- Hyperbolic Decline: 65-75% production loss in year 1 (vs 5-6% for conventional)
- Child Well Problem: 85% of new wells produce less than expected
- Inventory Exhaustion: Tier 1 acreage running out within 3-5 years
- Treadmill Economics: Continuous drilling required just to maintain output
Counter-Perspectives
- Technology continues improving operational efficiency
- Infill drilling potential may extend productive life
- Multi-zone development can maximize recovery
- Higher commodity prices improve economics on marginal wells
Decline Analysis Data Sources
- IEA - International Energy Agency, "The Implications of Oil and Gas Field Decline Rates" (2024)
- EIA - U.S. Energy Information Administration, Production Decline Curve Analysis
- SPE/JPT - Society of Petroleum Engineers, "Shale Wells Producing More Early On, Then Declining Faster Than Ever"
- Art Berman - Petroleum Geologist, artberman.com - Shale decline analysis
- David Hughes - Geoscientist, Post Carbon Institute - Shale production studies
- Goehring & Rozencwajg - Natural Resource Investors, Permian Basin analysis
- Novi Labs - Delaware Basin and shale well performance data
Remaining Potential & Future Opportunities
Development Potential
The STACK faces significant challenges competing for capital against the dominant Permian Basin.
Potential Advantages
- Multiple Zones: Meramec, Osage, Woodford stacked pay
- Light Oil: 42° API premium crude
- Infrastructure: Mature Oklahoma midstream network
- Operator Expertise: Devon, Gulfport experienced
Key Challenges
- Small Play: 3,300 sq mi creates spacing issues
- Production Down: 28% decline since 2019
- No M&A: Zero transactions since Q3 2022
- Capital Competition: Loses to Permian
Conclusion
The Meramec/STACK represents a cautionary example of what happens when a shale play fails to compete for capital. Despite having quality rock and multiple stacked zones, the STACK has lost the battle for investment dollars to the dominant Permian Basin.
Kingdom Exploration Assessment
Historical Context
- Peak activity: 2015-2018
- Peak production: 2019
- Multiple stacked zones available
- Quality rock: 42° API light oil
Current Reality
- Production down 28% from peak
- Zero M&A since Q3 2022
- Small play size (3,300 sq mi)
- Spacing concerns limiting development
The STACK demonstrates that even quality shale plays struggle when they must compete with the Permian for capital. The lack of M&A activity and declining production suggest operators view the STACK as a maintenance asset rather than a growth platform.
Data Sources & References
- EIA - U.S. Energy Information Administration, Oklahoma production data
- Mercer Capital - "The Inside SCOOP" SCOOP/STACK analysis
- Shale Experts - SCOOP/STACK M&A tracking
- Devon Energy - STACK drilling program investor presentations
- Gulfport Energy - SCOOP operations data
- SEG Wiki - STACK Play of the Anadarko Basin technical overview
- Oklahoma Corporation Commission - Well and production data
- Mineral Rights Podcast - SCOOP, STACK, and MERGE Plays overview
- Pruitt, Sean - Owner, Kingdom Exploration. Research compilation and analysis.
Important Disclaimer
This geological review is provided for educational and informational purposes only. The author, Sean Pruitt, is not a licensed geologist. Information presented here has been compiled from publicly available sources including USGS reports, state geological surveys, academic publications, and industry data. Reservoir properties and production data represent ranges observed across productive areas and may vary significantly by location. Kingdom Exploration makes no representations or warranties regarding the accuracy, completeness, or reliability of this information for any specific purpose. This content does not constitute investment advice, geological consulting, or professional engineering recommendations. Investors and operators should conduct their own due diligence and consult qualified licensed professionals including petroleum geologists, reservoir engineers, and financial advisors before making any investment or operational decisions.
