Rising interest in the STACK: A key oil play
Several upstream companies have recently turned their attention to the STACK play, due to its strong drilling returns even amid weak crude oil (USO) prices. In early May 2016, Newfield Exploration (NFX) announced its intentions to acquire acreage positions owned by Chesapeake (CHK).
A study by Raymond James on internal rates of returns (IRR) showed that both SCOOP and STACK plays had IRRs of 15%, even at sub-$40 oil prices.
Next, let’s explore Newfield Exploration’s 1Q16 production volumes and realized prices.