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Bakken Shale Deals

Written By Brianna Panzica

Posted November 26, 2012

North Dakota shale operations are continuing to expand.

Today, Houston-based oil and gas exploration and production company Magnum Hunter Resources Corporation (NYSE: MHR) announced its subsidiary plans to buy up assets in the Williston Basin region.

Bakken Hunter, LLC leads the company’s Bakken shale operations in North Dakota. As of March 31, the company’s producing reserves in the Williston Basin were 7.1 million barrels of oil equivalent (MMboe), and proved reserves totaled 20.6 MMboe.

But the subsidiary has agreed to a deal with Samson Resources Co. in which it will purchase 20,000 net acres in the Williston Basin for $30 million in cash.

Magnum Hunter already owns a partial stake in these lands, though it will increase its holdings from 47.5% to 100% with this deal. It will bring the company’s total acreage in the Williston Basin to 180,000 acres.

From the press release:

Mr. Glenn Dawson, President of Williston Hunter, Inc., commented, “The acquisition of these central Divide County assets will result in Williston Hunter becoming a Three Forks Sanish/Bakken operator in North Dakota along the border of Canada, which has been a primary goal. We anticipate our initial drilling operations in this area will commence in the first quarter of 2013 utilizing one-mile horizontal lateral drilling and completion technology similar to our successful cost-effective strategy deployed in the Tableland Field in Saskatchewan this past year.”

The acquisition includes 310,000 barrels of oil equivalent of producing reserves and a production level of 192 barrels of oil equivalent per day.

The deal is expected to close on December 20, 2012, and the effective date is August 1, 2012.

Magnum Hunter owns assets in many of the major North American shale plays including the Marcellus Shale, the Utica Shale, the Eagle Ford Shale, the Pearsall Shale, and the Bakken Shale. It operates mainly in the United States and Saskatchewan, Canada.

And this is just one of many Bakken Shale deals that have been occurring lately. The Bakken has been attracting investors as production has been steadily increasing all year long. In September, oil output hit a high of 660,000 bpd.

Less than two weeks ago, Targa Resources Partners LP (NYSE: NGLS) purchased a crude pipeline and natural gas collecting pipeline from Saddle Butte Pipeline, LLC, acquiring a total of 155 miles of crude pipeline and 95 miles of natural gas collecting pipeline.

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And also announced today was Enbridge Inc.’s (TSX: ENB) plan to develop a rail system to ship crude from the Bakken to Philadelphia refineries.

Enbridge will be teaming up with Canopy Prospecting Inc. for its project, which is estimated at around $68 million. Together, the companies hope to ship 80,000 barrels of Bakken crude a day, expandable to 160,000 bpd by 2014.

The companies will fix up rail tracks for its crude-delivering trains. It will lease a power generation facility, as the Financial Post reports, fix a 200,000-barrel tank, and also put work into pipelines in Philadelphia.

The company aims to expand its Bakken crude shipping capacity to 475,000 bpd by early next year.

That’s all for now,

Brianna Panzica

follow basic@brianna_panzica on Twitter

Energy & Capital’s modern energy guru, Brianna digs deep into the industry with accurate and insightful updates into the biggest energy companies and events. She stays up to date with the latest market moves and industry finds, bringing readers a unique view of current energy trends.

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