North Dakota and Montana Bakken Play -- Brigham has closed on the $4.6 million acquisition of approximately 46,000 net acres in the Bakken play located in 126 sections in northwestern North Dakota. Brigham has acquired a 100% working interest in the Bakken formation within the acreage, and with success, between 63 and 126 wells could be drilled to fully develop the acreage. Depth of the Bakken objective in the area is approximately 11,000 feet, with horizontal lateral extensions of 4,000 to 9,000 feet estimated to cost between $3.5 and $4.0 million.
This is an extension of ongoing Bakken activity in Richland County, Montana, approximately 20 to 40 miles to the west. In this area, 227 Bakken wells in a 324 square mile area have generated average initial production rates of 345 barrels of oil per day, average cumulative production to date of 112,000 barrels of oil per well, and estimated ultimate recoveries of approximately 376,000 barrels of oil per well.
Bud Brigham, the Chairman, President and CEO stated, "Given current commodity prices and the associated margins, combined with our significant recent drilling successes, we believe that our conventional program is generating strong returns on our drilling investments. Furthermore, the current commodity price outlook, together with technological advancements in drilling and completions, have also provided us with the opportunity to complement our successful conventional program by adding a substantial inventory of potentially low risk and predictable drilling projects. Earlier this year we undertook an internal initiative to evaluate numerous emerging non-conventional domestic plays, with the goal of building a diverse and attractive inventory of non-conventional projects to balance out our very successful, but by its nature sometimes less predictable, conventional program."
Brigham further stated, "To date we've assembled acreage covering up to 239 potential drilling locations in non-conventional plays. Of these, we previously announced plans to commence drilling two additional Granite Wash wells later this year or early in 2006, and we intend to commence our first Bakken well as early as late this year. For 2006 and beyond, we expect our non-conventional drilling program to be incremental to our growing investments in our successful conventional program, possibly representing up to 25% of our 2006 capital expenditures."
Apparent Lower Frio Discovery -- Brigham is currently completing the Imhoff #1, Brigham's first test in the company's Alamo Project. Brigham operates and retains a 75% working interest in the Imhoff #1, with Sempra Energy Production Company as a participant with a 25% working interest. Based on wireline log analysis, the Imhoff #1 encountered approximately 24 feet of apparent pay in various Lower Frio intervals. With a successful completion, one to two offsets could be drilled to fully develop the discovery. Brigham is currently utilizing this same drilling rig to commence another high reserve potential test in its Alamo Project, the B.K. Dillard #1. Results for the B.K. Dillard #1 are expected in December.
2005 OPERATIONAL STATISTICS
Brigham has spud 28 wells thus far in 2005, retaining an average working interest of approximately 56%. Twenty-five of these wells have been or are currently being completed, one has been plugged and two are currently drilling. Including the Mills Ranch #2-98, which began drilling in 2004 and was recently completed, Brigham's gross and net completion rate thus far in 2005 are 96% and 95% respectively.
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