Northern Oil recently participated in the successful drilling and completion of an additional seven oil producing wells in the North Dakota Bakken trend. The seven wells began producing at an average initial rate of 740 barrels of oil per day.
RECENTLY COMPLETED WELLS
"Northern Oil continues to achieve consistent success in our non-operated drilling projects. As we exit 2008, we are beginning to make preparations to develop our substantial inventory of high working interest drilling units that we believe now entail less risk than our early wells given the evolution of the Williston Basin oil fields," Reger added.
With these most-recent seven completions, Northern Oil now holds working interest in 28 producing wells and has drilled with a 100% success rate in 2008.
ADDITIONAL WELLS DRILLING AND COMPLETING
Northern Oil is also a working interest participant in an additional 15 wells currently drilling or completing in the Bakken and Three Forks/Sanish formations.
Northern Oil's current participation in the Bakken and Three Forks/Sanish formations continues to accelerate and our working interest in wells continues to increase," added Reger. "We have not seen a reduction in capital being devoted to the development of the Bakken play despite lower oil prices. Further, permitting and drilling activity continues to increase particularly in North Dakota." Northern Oil acreage has now been included in approximately 170 permitted or docketed-for-permit drilling locations.
On October 30, 2008, Northern Oil executed a drilling agreement with Slawson Exploration in Mountrail County, North Dakota for a one-well drilling arrangement. Under that agreement, Northern Oil agreed to sell 120 net acres in Section 5, Township 151 North, Range 92 West for $3,000 per net acre. Once the transaction is complete, Northern Oil will control a 42% working interest in the section.
The Jericho 1-5H well, expected to be drilled pursuant to the agreement, will be a horizontal Bakken well drilled in the 640 acre section. The agreement is conditioned on Slawson commencing drilling by March 1, 2009.
Reger commented, "This agreement with Slawson is exciting for the company because it allows us to participate with a 42% working interest in a well directly offsetting high rate production and substantiates the value of the subject acreage. Slawson Exploration has a track record of success in close proximity to this location and we believe this agreement allows us to leverage their expertise while retaining a significant working interest."
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