Kodiak Oil & Gas Gains Additional Bakken Shale Acres
Acquired 13,500 net mineral acres in the Williston Basin principally in Williams County, with WI in 7 gross operated producing wells and 4 gross wells waiting completion, gaining approximately 3,000 BOE/d.
Kodiak Oil & Gas Corp., Denver, (NYSE: has closed its purchase of producing properties and undeveloped leasehold in the North Dakota Williston Basin from privately held, Midland-Texas based BTA Oil Producers LLC for $235 million.
The deal includes 13,500 net mineral acres principally in Williams County in an area just north of Kodiak’s Koala project area. Kodiak will assume operatorship of 15 drilling units on the contiguous leasehold to be acquired. Kodiak has also agreed to assume the seller's term-contract for a drilling rig, subject to the rig owner's consent.
The transaction includes a working interest in seven gross (5.1 net) operated producing wells. The acquisition also includes four gross (2.2 net) wells that have been drilled and are waiting on completion, two of which are projected to be completed before closing, one gross (0.35 net) well currently drilling, and four permitted and built locations. Once the four permitted wells are drilled, nearly all of the leasehold to be acquired will be held by production by early 2012.
Production is projected to be approximately 3,000 barrels of oil equivalent per day at closing.
Pro forma, Kodiak with have an acreage position in the Williston Basin of nearly 110,000 net acres.
Included in the acquisition are certain surface equipment and gas pipeline connection facilities that tie into a regional third-party natural gas gathering system. The operated lands are within a few miles of a crude oil railway terminal and interstate pipeline interconnect that is expected to be fully in service during 2012.
Also included in the transaction is a newly drilled salt water disposal well and water gathering pipelines.
The drilling rig contract that Kodiak has agreed to assume is currently drilling the last of the four wells under the primary contract and, subject to the rig owners' consent, it will provide Kodiak with an option for a 12-well extension.
Kodiak is also participating with an approximate 50% nonoperated working interest under leasehold in Dunn County where two rigs are presently drilling.
Kodiak chairman and chief executive Lynn Peterson says, “We continue to execute on our stated goal of acquiring contiguous, operated leasehold in the heart of the Bakken play. Today's transaction, when closed, will add significantly to our leasehold and complements our core operating area in McKenzie County where we have been completing strong producing wells. The acquired operated lands are proximate to the major regional oil service center of Williston, N.D. which should provide some field-level operating efficiencies.”