Williams, a natural gas producer based in Tulsa, Okla., today announced that it has acquired approximately 85,800 net acres in the Bakken oil play from private owners for $925 million. According to the company, the acreage is located entirely on the Fort Berthold Indian Reservation and represents 185 million barrels of oil equivalent in total net reserves potential in the Middle Bakken and the Upper Three Forks formations.
The sale's effective date is Oct. 1 and is expected to close by the end of 2010. The assets in the proposed transaction also include production from 24 existing wells totaling 3,300 barrels per day of net oil.
In addition to the purchase price, Williams says it expects to invest additional funds for drilling and development costs totaling approximately $60 million in 2010 and $200 million to $300 million in 2011. There are three rigs currently operating on these properties. Williams says it expects to double the current level of drilling activity to six rigs by 2012.
The company expects the new leases to be producing more than 20,000 barrels per day by the end of 2012. By 2013, approximately 25 percent of the company's exploration and production revenue streams are expected to be generated by oil production, up from 7 percent in 2010.
The Williams press release is here.
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