Transactions In The Bakken Are Heating Up

Companies Going Big In Bakken $XOM $CLR $KOG $STO $EOX

When you hear the name Bakken you think of huge companies making lots of money.  The amount of wells and new companies has increase dramatically in the last few years as everyone rushes to stake their claim.  These are some of the most active companies in this play

The Bakken formation is a large unconventional resource that underlies most of the western portion of North Dakota and Eastern Montana. This oil shale formation is located in what is called the Williston Basin. This formation is a rich deposit that the U.S. Geological Survey calls the largest continuous oil accumulation it has ever evaluated. There are currently over 6,617 oil wells in North Dakota, and that number is anticipated to increase as more oil is extracted.

The Bakken Formation consists of three levels: Upper shale, Lower Shale, and the Middle Member, which is a dolemetic sandy layer. The Middle Member of the Bakken is flooded with oil and gas at high pressures.

Montana oil production dates back to the 1950s. By the year 2000, the entire state of Montana produced 18 million barrels of oil. Four years later, this figure doubled to 36 million barrels due almost entirely to the application of horizontal drilling in the Bakken, most particularly in the Elm Coulee Field in Richland County Montana.

Exxon Mobil

ExxonMobil (XOM) is acquiring Denbury Resources’ (DNR) shale assets in the Bakken region, increasing its Bakken holdings there by approximately 50%. Denbury will receive $1.6 billion in cash as well as Exxon’s interests in the Hartzog Draw field in Wyoming and Webster field in Texas. These regions produce roughly 3,600 net oil equivalent barrels per day of natural gas and liquids, according to Exxon. The deal by Exxon and subsidiary XTO Energy will bring the company 196,000 net acres in North Dakota and Montana, expanding the company’s entire Bakken holdings to approximately 600,000 acres. Exxon expects more than 15,000 oil equivalent barrels per day from the assets in the second half of 2012.

XOM Exxon Mobil Corp

Continental Resources

Continental Resources, Inc. (CLR) acquired Enid, Oklahoma-based Wheatland Oil, Inc. assets for $340 million. Wheatland’s assets include 37,900 net acres in the North Dakota and Montana Bakken play and interests in more than 1,000 gross wells, with net proved reserves of 17 MMBoe as of year-end 2011 and production of 2.5 Mboepd in December 2011 and net proved reserves of 17 MMboe, as of year-end 2011. The implied transaction value is approximately $9,200 per acre or $136,000 per flowing barrel.

CLR Continental Resourses Inc

Kodiak Oil and Gas

In October 2011, Kodiak Oil & Gas Corp. (KOG) closed an agreement with a private oil and gas company to acquire additional producing properties and undeveloped leasehold in the Williston Basin for approximately $245 million in cash. Included in the acquisition are approximately 13,400 net mineral acres located primarily in Williams County, N.D. Kodiak assumes operatorship of 15 drilling units on the contiguous leasehold acquired. The purchase price for the asset package, which was paid in cash, was $245 million. Earlier in the summer, Kodiak Oil completed its acquisition of 25,000 net Williston Basin acres in McKenzie County, North Dakota, for approximately $87 million in cash and stock.

KOG Kodiak Oil & Gas

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