Abraxas Petroleum announced that upon the closing of the pending merger with Abraxas Energy Partners, L.P., Abraxas will own approximately 30,000 net acres located within the currently outlined limits of the Bakken and Three Forks resource plays in North Dakota and Montana.
The overwhelming majority of Abraxas' acreage position is held by production from other wells currently producing on the leases. Abraxas' leasehold is principally located in McKenzie, Williams, Dunn, Divide and Burke Counties of North Dakota. Without significant lease expiry issues to contend with, Abraxas intends to closely monitor industry activity within the vicinity of its leasehold and to participate in wells proposed by other operators to the extent Abraxas owns a working interest in the proposed well. This will afford our technical staff the ability to gain valuable knowledge on current drilling and completion practices before Abraxas begins to drill its own wells to the Bakken/Three Forks formations.
Earlier this year, Abraxas participated for a small working interest in a successful horizontal Three Forks well in McKenzie County, North Dakota operated by one of the more experienced Bakken/Three Forks operators. After a multi-stage fracture stimulation, the well initially produced in excess of 700 barrels of oil per day and continues to produce approximately 300 barrels of oil per day. Abraxas owns a large working interest in several sections directly offsetting this well. Abraxas has recently elected to participate with a larger working interest in a Bakken well in Divide County, North Dakota which will be operated by another experienced Bakken/Three Forks operator. Abraxas owns interests in a sizeable block of land offsetting this new well which is scheduled to commence in August.
"We are pleased to have the opportunity to sit back and learn more about the Bakken/Three Forks resource plays where drilling and completion technology advances are continually being made before we invest significant dollars in drilling and operating our own wells with a much larger working interest. With improving economics due to industry innovations which are driving down costs coupled with increased performance and firmer oil prices, these Rocky Mountain resource plays may prove to be a significant growth driver for Abraxas for years to come," commented Bob Watson, Abraxas' President and CEO.
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