Franco-Nevada

SCOOP/STACK (Other) (Oil & Natural Gas)

Scoop Stack Other

Location: Oklahoma, United States
Operator: Continental Resources, Ovintiv Inc., Devon Energy, Others
Royalty: Various Royalty Rates

Other Royalties

In the fourth quarter of 2016, Franco-Nevada purchased royalty rights in the STACK shale play in Oklahoma’s Anadarko basin for approximately $100 million. The current focus is on the Meramec formation, although the royalties have exposure to multiple horizons at depth, including the Woodford and Osage formations.

In the second quarter of 2017, Franco-Nevada acquired additional mineral title and royalty interests for $27.6 million, which added to its existing position in the STACK and provided new exposure to the SCOOP shale play to the south. In total, the assets consist of GORRs and mineral title rights which apply to approximately 1,433 acres (net to Franco-Nevada).

The top three operators of the acreage are Ovintiv Inc. (formerly Encana), Devon Energy, and Continental Resources. These operators reduced their drilling activity in the play in 2020 owing to a drop in commodity prices. In 2020, 12 wells were drilled and completed on royalty lands, which is a significant decrease from 148 wells drilled the prior year. The potential inventory of the assets is 4,400 estimated undeveloped well locations across multiple horizons. The inventory life of the assets is many decades even after assuming drilling rates return to more normalized levels.

ASSET HIGHLIGHTS

  • Royalty acreage positioned in the core of the SCOOP/STACK resource play
  • SCOOP/STACK provides exposure to both oil and gas-rich areas
  • Exposure to multiple formations at depth

2020 2019 2018
Revenue to Franco-Nevada ($ million)1,2 $ 21.6 $ 26.2 $ 15.7

1 Revenue refers only to payments made to Franco-Nevada
2 Includes revenue and production from both Continental Royalty Acquisition Venture and Other SCOOP/STACK royalties