VAALCO Acquires Bakken Interest in Montana

- VAALCO Acquires Bakken Interest in Montana

Friday, September 09, 2011
VAALCO Energy

VAALCO Energy, Inc. today announced that the Company has entered into a definitive agreement with Magellan Petroleum Corporation to acquire and develop an operating working interest in approximately 23,000 net mineral acres of oil, gas and mineral leases covering the Bakken and deeper formations in the East Poplar Unit and the Northwest Poplar Field in Roosevelt County, Montana. Under the terms of the agreement, VAALCO has paid Magellan $5 million and committed to spend approximately $15 million to drill three wells.

VAALCO has agreed to drill three wells to the Bakken formation and to formations below the Bakken in the Poplar Field. All three wells will be drilled by the end of 2012 and one well will be drilled on or before June 1, 2012. Of these, one well will be drilled horizontally to test the Bakken Formation, one well will be drilled vertically to test the Red River Formation, and the third will be targeted at VAALCO's discretion. Under the terms of the definitive agreement, VAALCO will have a 65% working interest in the Bakken and Deep Intervals within the Poplar Field.

Robert Gerry, Chairman and CEO said, "We are excited to complete this acquisition of additional Bakken Acreage, which we believe will be a powerful source of oil revenues to VAALCO over the next several years. In addition to the potential we see in the Bakken formation, we will also be evaluating deeper objectives in the Three Forks, Nisku and Red River formations. Our seismic studies indicate that there are structures in these deeper objectives that could be the source of prolific production and we are optimistic that we can prove up reserves and create shareholder value."

Magellan will retain its current ownership for all formations above the Bakken, including the currently producing Charles and Tyler formations and will retain the remaining 35% of the Bakken and deeper rights in partnership with VAALCO.

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Magellan, Vaalco Sign LOI for Bakken Development in Montana

- Magellan, Vaalco Sign LOI for Bakken Development in Montana

Monday, July 18, 2011
Magellan Petroleum Corporation

Magellan Petroleum Corporation signed a letter of intent (LOI) with Vaalco Energy Inc. to begin work on developing the Bakken formation and deeper horizons within the East Poplar Unit and Northwest Poplar Field in Roosevelt County, Montana (Poplar).

The LOI terms remain subject to closing on a definitive Purchase and Sale Agreement ("PSA"). The LOI contemplates a farm-out to VAALCO of an operating working interest in all of the approximately 23,000 net acres of oil, gas and mineral leases covering the Bakken and deeper formations at Poplar.

VAALCO has agreed to acquire 65% in return for cash consideration and for bearing 100% of the cost to drill three wells by the end of 2012. Parties would then move forward together as 65% / 35% owners respectively to further develop the prospects.

Magellan will retain its current ownership for all formations above the Bakken, including the currently producing Charles and Tyler formations where all Poplar proved and probable reserves are located.

William Hastings, President and CEO commented, "After conducting evaluation drilling, coring, and petrography work, we remain very encouraged about a number of prospective horizons at Poplar. Our new partnership with VAALCO is another step, with a strong and experienced partner, toward monetizing this asset and accelerating near-term development and production, not only from the Bakken but also from the Three Forks, Red River and associated deeper formations there in Montana. Given existing oil and gas infrastructure, our summer recompletion/infill program, our shallow gas plans, and, now, our Bakken partnership, we will continue efforts to add value, and perhaps extend, our position in Montana.

Magellan is a US-based energy company principally engaged in the acquisition, exploration, development and production of crude oil and "stranded" natural gas. Magellan's strategy involves the exploitation of already discovered oil and natural gas properties worldwide into non-traditional, growing markets. The company's properties and exploration acreage are located primarily in Australia, the United Kingdom, and the United States.

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FX, American Eagle to Explore Alberta Bakken in NW Montana

FX, American Eagle to Explore Alberta Bakken in NW Montana

Monday, May 09, 2011
FX Energy, Inc.

FX Energy, Inc. on Monday announced the signing of an agreement with American Eagle Energy, Inc., and Big Sky Operating LLC, to jointly explore approximately 75,000 acres in the Alberta Bakken in Northwest Montana. FX Energy's 10,000 acre field in the Southwest Cut Bank Sand Unit will be included in the joint exploration program and the Company will own a one-third interest in the overall project.

The companies plan to drill a minimum of three vertical wells to evaluate the potential of the acreage over the next several months. If the tests confirm the potential that the companies believe exists in the project area, the wells will be drilled horizontally and fracked. The drilling contractor for the wells will be the Company's wholly owned subsidiary FX Drilling Company.

"Since our partners were among the first movers in the Williston Basin Bakken play, their technical expertise is a valuable addition to the joint venture. We expect to drill and test several wells this year and if successful, our acreage position is sufficiently large to accommodate a continuous drilling program for years to come," said Andy Pierce VP of Operations for FX Energy.

FX Energy is an independent oil and gas exploration and production company with production in the US and Poland. The Company's main exploration activity is focused on Poland's Permian Basin where the gas-bearing Rotliegend sandstone is a direct analog to the Southern Gas Basin offshore England.

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Brigham Exceeds Records at ND, Montana Bakken Wells

Brigham Exceeds Records at ND, Montana Bakken Wells

Wednesday, April 13, 2011
Brigham Exploration Co.

Brigham announced that its Sorenson 29-32 #2H Bakken well produced a North Dakota Bakken record 5,330 barrels of oil equivalent during its early 24-hour peak flow back period. Brigham also announced that its Johnson 30-19 #1H Bakken well, which is located in Richland County, Montana, produced a Montana Bakken record early 24-hour peak flow back rate of approximately 2,962 barrels of oil equivalent. Brigham announced the completion of four additional North Dakota Bakken wells and, as a result, has completed 56 consecutive long lateral high frac stage wells in North Dakota at an average early 24-hour peak flow back rate of approximately 2,884 barrels of oil equivalent. Finally, Brigham provided an update on its drilling and completion activities in the Williston Basin.

 

Record North Dakota Bakken Well

Brigham announced that the Sorenson 29-32 #2H produced a North Dakota Bakken record 5,330 barrels of oil equivalent (4,661 barrels of oil and 4.01 MMcf of natural gas) during its early 24-hour peak flow back period. The Sorenson 29-32 #2H, which is located in Brigham's Ross project area in Mountrail County, North Dakota, supplants Brigham's Sorenson 29-32 #1H as the record initial rate Bakken well. To date, based on publically available information, Brigham has the four highest initial rate Bakken wells and seven of the top 10 initial rate Bakken wells in the Williston Basin.

The Sorenson 29-32 #2H represents Brigham's first infill well completion in its Ross project area and was drilled, on average, approximately 1,720' from the Sorenson 29-32 #1H well, which was completed in April 2010. The Sorenson 29-32 #2H was completed with 38 frac stages.

The Sorenson 29-32 #2H and the Cvancara 20-17 #1H, which produced approximately 4,402 barrels of oil equivalent during its early 24-hour peak flow back period, were the first wells drilled and completed using Brigham's smart pad design. The smart pad design allows wells to be drilled from the same pad and simultaneously fracture stimulated. It is estimated that approximately 10% to 20% in cost savings can be achieved with implementation of smart pad drilling and completion techniques.

 

Record Montana Bakken Well

Brigham announced that the Johnson 30-19 #1H, which is located in Richland County, produced approximately 2,962 barrels of oil equivalent (2,684 barrels of oil and 1.67 MMcf of natural gas) during its early 24-hour peak flow back period. The well was completed with 36 fracture stimulation stages, and based on publically available information, is the record initial rate Bakken well in Montana.

 

North Dakota Operated Well Result Update

Brigham has now completed 56 consecutive long lateral high frac stage wells in North Dakota with an average early 24-hour peak flow back rate of approximately 2,884 barrels of oil equivalent.

 

Williston Basin Operated Drilling and Completion Update

Brigham's accelerated development of its acreage in North Dakota and Montana is proceeding with four operated rigs drilling in Rough Rider, two operated rigs drilling in Ross and one operated rig drilling in Montana. Brigham's eighth dedicated operated rig is expected to arrive in May.

In North Dakota, Brigham will spud its second Three Forks well in its Rough Rider project area in Williams County before the end of the month. An additional Three Forks well is anticipated to be spud in early summer in McKenzie County.

In Montana, Brigham recently completed drilling operations on the Beck 15-10 #1H, which is located in Roosevelt County, and will drill three consecutive additional wells in Montana, two of which are in Roosevelt County and one in Richland County. Later this month, Brigham will begin the fracture stimulation of the Voss 21-11H, which was purchased from another operator who drilled and completed the well in August 2007 with a single fracture stimulation. Brigham successfully removed the old liner from the wellbore and replaced it with a new liner with swell packers. Brigham expects to use 28 fracture stimulation stages to complete the Voss 21-11H.

Brigham currently has two wells flowing back, two wells fracing and 15 wells waiting on completion.

Later this month, Brigham expects to add additional fracture stimulation capacity thereby providing access to two fully dedicated frac crews focused on completing Brigham operated horizontal wells in the basin. At that time, Brigham estimates that it will be capable of fracture stimulating and bringing on line to production a minimum of eight wells per month due to the efficiencies gained by simultaneous stimulations.

 

Management Comments

Bud Brigham, the Chairman, President and CEO, commented, "Our team continues to deliver outstanding operational results with record setting Bakken wells in North Dakota and Montana. The impressive results of the Sorenson 29-32 #2H, which was drilled approximately one year after the Sorenson 29-32 #1H, clearly demonstrates the substantial net asset value attributable to our infill drilling locations."

Bud Brigham continued, "The extremely positive results of our Johnson 30-19 #1H, which is located in Richland County, further de-risks part of our Montana acreage for the Bakken. Our de-risking should continue based on the results of the fracture stimulation of the Voss 21-11H, which is expected to occur later this month. Plans are to continue to work towards de-risking larger parts of our Montana acreage by drilling a total of four additional wells over the next several months."

Bud Brigham concluded, "Importantly, our acceleration in the Williston Basin continues to be on schedule as we expect to begin operating two fully dedicated frac crews this month and expect our next dedicated operated rig to arrive in May. Our core acreage position combined with our operational expertise and accelerated development is anticipated to set us up for a very positive 2011 in terms of net asset value growth. Looking ahead, given the remarkably consistent results associated with our 56 consecutive long lateral high frac stage completions in North Dakota, it's likely that we will no longer release individual well early 24-hour peak rates, except in certain circumstances, such as where results provide specific information with respect to de-risking our non-core acreage and the resulting net asset value accretion."