GeoResources, Inc., (NASDAQ:GEOI), today announced an oil and gas property acquisition in the prolific Bakken Shale trend of the Williston Basin and provided an operations update.
On May 20, 2009, but effective April 1, 2009, the Company closed an acquisition of producing wells and acreage in the Bakken Shale trend of the Williston Basin. The acquisition was made through its existing joint venture with Slawson Exploration Company. Other participants in the acquisition include Northern Oil & Gas Inc. and Lario Oil & Gas Company. The Company acquired a 15% interest in approximately 60,000 net acres, and also acquired 15% of varying working interests in 59 producing and productive wells. The Company’s share of producing and productive wells adds in excess of 300,000 BOE of proved producing reserves. This reserve estimate excludes numerous proved undeveloped and probable locations. Based on June estimates, the acquisition further adds daily net production of about 180 Bopd. The Company’s net acquisition cost was approximately $10.4 million, prior to adjustments for post effective date net revenues. As a result of the acquisition, the Company now has working interests in the area ranging from 10% to 15% in approximately 100,000 net acres. Of those total acres, approximately 59,000 net acres are located in Mountrail County, with the remainder located in adjacent North Dakota counties and in Richland County, Montana. The joint venture is presently running one drilling rig and plans to add two rigs in July and possibly a fourth drilling rig by the first quarter of 2010. We currently expect to drill or participate in 45-50 wells over the next 18 months, exclusive of interests resulting from nominal acreage contributions to non-operated units. The Company expects to have an average net working interest in the range of 7%. The acquisition was funded with cash and borrowings from the Company’s Senior Secured Revolving Credit Facility.
Tags: Acquisition, GeoResources, wells
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