2010-06-30-2010-06-29-2010-06-29
Acquired 50% WI in 48,000 acres in DJ Basin, Weld County, Co. JV is targeting Niobrara formation; drilling campaign to begin in July 2010.
Expanding its footprint in key U.S. unconventional plays, Billings, Montana-based E&P company Voyager Oil & Gas Inc. (OTCBB: VYOG) has acquired a 50% working interest in approximately 48,000 acres in the Denver-Julesberg Basin in Colorado from privately held Houston-based Slawson Exploration Co. Inc. for $7.5 million.
The assets involved acreage in Weld County, near high-rate producers such as the Jake well, a Niobrara discovery operated by EOG Resources Inc., Houston, (NYSE: EOG), which tested an initial production rate of 1,750 barrels of oil and 360,000 cubic feet of gas per day in October 2009.
The joint-venture partners are also targeting the Niobrara formation in a continuous drilling campaign slated for early July. As operator, Slawson expects to complete three test wells by October and will subsequently target an additional 57 locations through 2011.
An emerging Bakken and Niobrara player, Voyager will participate in the exploration and development program on a heads-up basis on all wells drilled and will also participate to earn an interest in all additional acreage acquired in an area-of-mutual-interest arrangement consisting of assets in Weld and Laramie counties.
Voyager chief executive J.R. Reger says the partnership enables the company to increase its net-well position in a burgeoning oily resource play at an excellent price with a top-level operator.
Reger says, "Slawson's rich history in the Rockies, its reputation for drilling efficient and effective wells and its excellent geosciences department make them an ideal partner to explore this exciting play. We believe this asset complements our other positions in the Williston Basin and allows us to continue to leverage our low-cost structure and competitive leasing advantage."
Voyager will fund the acquisition and initial drilling commitments with approximately $12.5 million of cash on hand. The company is fully-funded through 2010 and has no debt.
Analyst Neal Dingmann notes that Wunderlich Securities believes the deal is positive and maintains its Buy rating while also increasing its price target from $5 to $6 per share due to the company's new position in the Niobrara.
Voyager now holds approximately 24,000 net acres targeting the Niobrara in Colorado and Wyoming. Additionally, the company holds 24,000 net acres targeting the Bakken formation in North Dakota and Montana.