Teton Energy Closes Williston Basin Bakken Oil Play
Teton Energy Corporation, an independent Rocky Mountain oil and natural gas producer, has closed the previously announced transaction with American Oil and Gas, Inc. to acquire a 25% working interest in acreage located primarily in Williams County, North Dakota.
As originally announced, the agreement called for Teton to purchase a 25% interest in American's 45,000 net (65,000 gross) acres for $5 million. Since the agreement was signed, American acquired additional acreage within the area of mutual interest. The final acreage count on May 5 was approximately 58,000 net acres, resulting in a purchase price of $6.16 million or $420 per acre for a 25% interest in the 58,000 net acres. At closing, Teton paid $2.46 million to American. The remaining $3.69 million is required to be paid between closing and June 1, 2007, and will be used to fund American's 50% working interest for drilling and completion on the first two wells. The $3.69 million is in addition to Teton's obligation to fund its 25% working interest in all drilling and completion costs over the same period.
Other participants in the Bakken acreage include American (50%) and
Evertson Operating Company (25%). Evertson, the designated operator, plans to
drill two multi-lateral horizontal test wells to the Mississippian Bakken
Formation at a depth of about 10,500 feet beginning mid-year 2006. Multiple
stage fracture stimulation will be used to increase recoveries. 640 acre
spacing could allow for at least 100 locations over the acreage if economic
recoveries are confirmed by the initial test wells. Secondary horizons
include the Madison, Duperow, Red River, Nisku, and Interlake formations.
- American Oil & Gas Increases Ownership in Bakken Acreage (Jul 20)
- Teton Energy Makes 2 Executive Appointments (Jul 06)
- Puckett Land Co Nixes Purchase Agreement for Piceance Basin Assets (Jun 01)