Jan, 2008 Petrobank Closes a deal that bought Peerless Energy Petrobank's in Jan 2008 has over 12,200 boepd of high netback, Bakken production. Petrobank now has an inventory of 540 net Bakken locations based on a drilling density of only four wells per section, and we plan to drill 154 of these locations in 2008, which we expect will make Petrobank the most active operator in the play. If the 154 wells follow the average well that they currently have 16800 bopd of production should be added in 2008 for a total of 29000 bopd. The 390 other locations would be expected to add 44,000 bopd for 73,000 bopd by 2010. This from 0.1% of the total Bakken formation. Presumably this is one of the better spots, but if the rest averaged out to only 10% of the quality then that would still mean 100 times the production or 7.3 million bopd. Montana already produces over50,000 bopd from the Bakken Formation and the Parshall field part of the Bakken in North Dakota looks like it will produce over 100,000 bopd.
The majority of Petrobanks Bakken land base is expected to yield four horizontal wells per section. Petrobank's internal estimate is that each well will recover in excess of 150,000 barrels. Nov 2007, Petrobank estimate our drilling inventory at 532 (497 net) locations.
The Bakken formation is capable of high initial production rates of sweet, light, 41+ degree API gravity oil, and liquids-rich solution gas. This resource is significant with approximately 4.5 million barrels of original oil-in-place per section (square mile or 640 acres) of land within the defined play area.
The key to unlocking the potential in the Bakken has been recent advances in horizontal well techniques, particularly the application of new horizontal fracturing and completion technologies. Horizontal wells allow maximum exposure to the reservoir, and new completion techniques allow fracturing of the siltstone along the full extent of the wellbore to maximize production. Our horizontal drilling and fracture stimulation techniques allow us to avoid fracturing out of the Bakken zone, thereby minimizing associated high water production common in earlier horizontal wells, and consequently significantly improving oil productivity. Ultimately we expect this to lead to substantially improved recovery rates.
Petrobank drilled 28 (25.5 net) Bakken wells, bringing the total for the first three quarters of 2007 to 52 (47.3 net) wells. We now anticipate that by year-end we will have drilled approximately 62, 100% working interest, wells and an additional 12 (5.5 net) non-operated wells for a total of 74 (67.5 net) Bakken wells in 2007.