Magnum Hunter provided a drilling, operational, and production update on the activities of its Williston Hunter. All of these activities are within the Williston Basin of North Dakota and Saskatchewan, Canada. This includes the Middle Bakken, Three Forks Sanish, and the Madison formations located across approximately 46,500 net acres in Burke and Divide Counties, North Dakota and approximately 35,240 net acres located in the Tableland Field directly across the North Dakota border in Saskatchewan, Canada.
Williston Hunter's successful efforts to restore weather related lost production volumes, complete previously drilled wells, and put on line newly drilled wells, increased total production during the third quarter of fiscal year 2011. The Williston Hunter Division achieved a daily production exit rate of approximately 1,670 Barrels of oil equivalent ("Boe"). Williston Hunter has an additional 16 gross (3.2 net) new wells currently in active completion operations and 11 gross (2.2 net) wells awaiting completion. The Company estimates the Williston Hunter Division to achieve a December 31, 2011 production exit rate of approximately 2,300 Boe per day; 87% of production is light oil.
Magnum Hunter's allocated fiscal year 2011 capital budget for the Williston Hunter Division remains at approximately $70 million, 27.5% of the total Company capital budget. This includes the drilling of 52 gross (11.3 net) Middle Bakken/Three Forks Sanish wells, acquiring land, installing production facilities and the completion of 18 gross (4.1 net) wells previously drilled but not completed in 2010. Williston Hunter has identified approximately $25 million in capital projects for the balance of fiscal year 2011, continuing with five drilling rigs active in North Dakota and one active drilling rig in Canada.
As of the first of October 2011, Williston Hunter had drilled 35 gross (6.2 net) wells year-to-date. In North Dakota, 32 gross (3.2 net) wells were spud or in the process of being spudded and 3 gross (3.0 net) wells were drilled in Saskatchewan. Significant progress has been made in reducing the completion backlog of the 18 gross (4.1 net) wells in Williston Hunter's year-end 2010 inventory. There have been 16 gross (3.9 net) wells now completed and on production. Additionally, 17 gross (3.3 net) wells of the total wells drilled in 2011 have now been completed.
Mr. Glenn Dawson, President of Williston Hunter, commented, "During the third quarter of fiscal year 2011, Williston Hunter successfully restored 97% of the weather related shut-in production. We have refocused our efforts in an aggressive drilling and completion program designed to reduce costs, improve IP rates and increase our internal rate of return on capital deployed. Drilling and completing multiple long lateral wells from one surface location has reduced our footprint and cut production costs. Recent modifications to our hydraulic fracturing techniques and artificial lift design have also resulted in higher initial oil production rates. A number of recent data points from industry competitors regarding new lease acquisitions adjacent to our existing significant land positions has further supported the value of our mineral acreage position. As with Magnum Hunter's other two resource divisions, Williston Hunter has a multi-year inventory of 2,982 net currently identified drilling locations across our 81,740 net leasehold acreage position located in North Dakota and Saskatchewan, Canada. Our Company's in-house reservoir engineers and geologists have identified net resource potential of 114 Million Boe over the Company's entire Williston Basin acreage position."
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