AEZ a Pure Bakken oil Field play being added to Russell 3,000 Index on June 25th
Jun 18, 2010 3:23 PM | about stocks: AEZ, BEXP, MRO, USEG, EOG, XOM, BP, RIG, APC, DO, OII, ATPG, LINE, GMXR, ARD, COP, TOT, OIL, DUG, DIG, DTO
Quick Profile of AEZ from their latest 10Q:
On March 31, 2010, we sold all of our oil and gas interests in the Fetter and Krejci projects located in the Power River Basin, Wyoming and received approximately $46.2 million in sales proceeds. Our primary focus area is our Goliath Bakken and Three Forks focused project located in the Williston Basin, North Dakota where we control approximately 68,500 net acres.
The Williston Basin has become one of the most actively drilled basins in the continental United States. Recent advancements in drilling, completion and stimulation technologies used by other operators have resulted in commercially successful Bakken and Three Forks wells. We have recently commenced drilling operations that utilize these advanced technologies.
In December 2009, we commenced drilling the Tong Trust 1-20H Bakken well pursuant to a participation agreement with Halliburton Energy Services, Inc. ("Halliburton"). Halliburton paid us approximately $1.1 million in cash and paid 100% of our share of costs to drill and complete the Tong Trust 1-15H well. In return, Halliburton earned a 25% working interest in approximately 30,000 of our net acres in the eastern portion of our Goliath project, resulting in our current ownership in the Goliath project area of approximately 68,500 net acres. We now own a 27.1% working interest and an approximate 21.7% net revenue interest in the Tong Trust well. In mid-March 2010, the Tong Trust well was placed on production at an initial 24 hour production rate of 1,421 barrels of oil equivalent ("BOE") per day (1,114 barrels of oil and 1.84 MMcf of natural gas).
In February 2010, we commenced drilling the Ron Viall 1-25H Bakken well at Goliath and in mid-May, this well was placed on production at an initial 24 hour production rate of 2,844 BOE (1,981 barrels of oil and 5.2 MMcf of natural gas). This well was drilled outside of the area of mutual interest with Halliburton. We own a 95% working interest and an approximate 76% net revenue interest in this well.
We now have a two-rig continual drilling program for 2010. Ensign rig 24 is currently drilling the Bergstrom 15-23H Bakken well (95% WI) located in T156N-R98W Sections 23 and 14, Williams County, and Nabors rig 486 is drilling the Johnson 15-35H Bakken well (approximate 83% WI), located in T156N-R98W Sections 35 and 26, Williams County. Including wells already drilled, we expect to drill a total of ten to twelve gross (seven to nine net) wells during 2010 and expect that at least one of these wells will target the Three Forks formation.
We are in the process of evaluating the productive potential of another area located in the Rocky Mountain region that we call our Bigfoot project. This is a shallow natural gas project where we currently control approximately 213,000 gross (131,000 net) acres. We are primarily targeting a formation that is less that 2,000' deep and have drilled test wells for less than $100,000 per well. During 2010, we expect to continue to drill test wells as we evaluate the commercial viability of this area.
Disclosure: Author is long shares of AEZ
Themes: Bakken Oil and Gas