The week in bakken

Posted by bakkenexpert

In the past week or so, we had the following news regarding the bakken region

• American Oil & Gas Inc. (NYSE Amex: AEZ) announced that drilling commenced on the Tong Trust 1-20H well, in Williams County, North Dakota.   The Tong Trust well is spaced on 1,280 acres and is designed for an approximate 9,000′ horizontal lateral to be drilled in the Bakken formation.  Drilling operations are estimated to take approximately 30 to 45 days and completion, including fracture stimulation, is expected to follow within two to four weeks of drilling rig release, depending on weather.  AEZ is currently in the $3.80 range and good results could propel the stock to $5 in the next 2 months.
• Hess said it has budgeted $2.4 billion for production, $850 million for exploration and $600 million for developments. Nearly 45% of its 2010 capital budget will spent in the U.S., including in Bakken Shale development in North Dakota.   It is significant that a company of Hess stature is putting such a large portion of its exploration budget in one area.   This bodes well for further M&A in the area.
• Brigham Exploration Company (NASDAQ: BEXP) announced that its operated Williston 25-36 #1H produced approximately 3,394 barrels of oil equivalent per day (2,769 Bopd and 3.75 MMcf/d) from the Bakken formation during an early 24 hour flow back period. Brigham’s nine Bakken and Three Forks wells have averaged an early peak production rate of approximately 2,066 barrels of oil equivalent per day.
• Exxon Mobil Corporation (NYSE: XOM)  announced an all-stock transaction valued at $41 billion to acquire XTO Energy Inc  . The agreement, which is subject to XTO stockholder approval and regulatory clearance, will enhance ExxonMobil’s position in the development of unconventional natural gas and oil resources.   Digging a bit deeper, the move will also give XOM exposure to XTO’s array of assets in the bakken region.

It looks like the land grab is heating up for the larger players to start laying claim to their piece of the bakken pie.   Expect further M&A from the larger players to get in on the action.

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