By OGJ editors
HOUSTON, Nov. 15 -- Williams Cos. Inc., Tulsa, will pay undisclosed private owners $925 million to acquire 85,800 net acres in North Dakota that it estimates represent 185 million boe net potential recovery from the Middle Bakken and Upper Three Forks formations.
The purchase will diversify the company’s exploration and production interests into light, sweet crude oil production. By 2013, 25% of the company’s E&P revenue streams are expected to be generated by oil production, up from 7% in 2010.
The properties produce 3,300 b/d net from 24 wells. Three rigs are running on the acreage, which is entirely on the Fort Berthold Indian Reservation and in the “best geologic portion of the strongest onshore oil play in the US,” Williams said. The purchase is to close by the end of 2010.
Williams expects to invest $60 million in 2010 and $200-300 million in 2011 to develop the properties, double the rig count by 2012, and hike production to more than 20,000 b/d by the end of 2012.
Williams has also accumulated 100,000 net acres in Pennsylvania’s Marcellus shale play in the last 18 months.
The company said it will “build new relationships in North Dakota and with the Three Affiliated Tribes—the Mandan, Hidatsa, and Arikara—who call the area around these properties home.”