Texas companies agree on $1.85 billion Bakken dealTwo Texas companies have reached a $1.85 billion deal on oil-producing properties and undeveloped land in the Bakken shale formation in North Dakota and Montana. North Dakota Mineral Resources Director Lynn Helms said it’s the biggest oil transaction on record for the state’s part of the Williston Basin, which includes the Bakken formation.
By: By James MacPherson, The Associated Press , The Jamestown Sun
BISMARCK — Two Texas companies have reached a $1.85 billion deal on oil-producing properties and undeveloped land in the Bakken shale formation in North Dakota and Montana.
North Dakota Mineral Resources Director Lynn Helms said it’s the biggest oil transaction on record for the state’s part of the Williston Basin, which includes the Bakken formation.
“This is a major deal,” Helms said.
XTO Energy, of Fort Worth, announced Wednesday that it would buy 352,000 acres of Bakken shale land in Montana and North Dakota from Headington Oil Co., a privately held company based in Dallas.
XTO said the deal includes $1.06 billion in cash and common stock valued at $790 million, or $67.35 per share.
Gary Simpson, an XTO vice president, said the agreement includes all Headington’s “assets, field people and operations people,” though he did not immediately have a figure on the total number of jobs.
“XTO has never been in the Bakken before and it’s my understanding that Headington will now pull out completely,” Helms said.
Headington officials did not immediately return telephone calls or an e-mail from The Associated Press seeking comment.
Headington said last month that it had about 150 wells working in the Bakken — about 100 of them in Montana — with plans to drill at least 100 more. The company has said it was among the first to successfully drill beneath Lake Sakakawea earlier this year, using horizontal drilling technology.
Simpson said XTO currently produces about 50,000 barrels of oil daily, mostly in west Texas. He said the Bakken acquisition, which is expected to close by July 15, will increase the company’s production by 10,000 barrels of oil a day.
The Bakken deal is the second biggest in company history, Simpson said, behind a $2.5 billion acquisition last June of utility company Dominion Resources Inc.’s operations in the Rocky Mountains, Gulf Coast, New Mexico’s San Juan Basin and South Louisiana.
The Bakken shale formation encompasses some 25,000 square miles in North Dakota, Montana, Saskatchewan and Manitoba. About two-thirds of the acreage is in western North Dakota, where the oil is trapped in a thin layer of dense rock nearly two miles beneath the surface.
The U.S. Geological Survey released a study last month that estimated up to 4.3 billion barrels of oil could be recovered from the Bakken formation in North Dakota and Montana, using current technology.
The Geological Survey said about 105 million barrels of oil have been produced from the Bakken through last year. The Elm Coulee oil field discovered in 2000 in eastern Montana, near the North Dakota border, has produced about 65 million barrels of the total, the agency said.
XTO estimates there are 68 million barrels of oil in proven reserves on the land it acquired from Headington. The acquisition’s primary producing field is in the Elm Coulee oil field, the company said.