Bakken success turns private firms into targets

By OGJ editors
HOUSTON, Feb. 15
-- Smaller private operators with some of the best acreage and wells in the Bakken/Three Forks shale play in North Dakota are “nearly certain to attract interest from potential suitors,” concluded a study by IHS Herold.

In a study of 1,450 horizontal wells completed in either formation in Mountrail, McKenzie, Williams, and Dunn counties since 2006, IHS Herold found that a number of private companies ranked well with public operators in delivering median first-month production despite having much smaller well counts.

The study compared the median wells’ average production in its first, second, and third months online.

Merger and acquisition values for undeveloped acreage in the play continue to set new highs, the study concluded. Well performance, it noted, is generally strong but varies considerably.

IHS Herold said it expects the trend of acquisitions of private properties to continue because most of the prospective acreage is leased and few alternatives exist to establish or meaningfully expand a company’s presence in the play. Size is the primary driver of an acquisition, since a small leaseholding “can’t move the needle for a big, publicly traded company.”

The company plans to study other plays of interest.

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