Vaalco Energy (USA) Inc., Houston, will drill three wells to the Bakken and deeper formations in the East Poplar and Northwest Poplar units in Roosevelt County, Mont., under an agreement with a subsidiary of Magellan Petroleum Corp., Portland, Me.
Upon completion of the three wells drilled at its sole expense, Vaalco will have earned a 65% working interest in the deep intervals in Poplar field. One well is to spud by June 1, 2012, and the other two by Dec. 31, 2012. Vaalco paid Magellan $5 million upon closing of a lease purchase, sale, and participation agreement.
One well will be drilled horizontally to test the Bakken, one well will be drilled vertically to test the Red River formation, and a third will be targeted at Vaalco’s discretion.
In addition to its 35% working interest in the deep intervals, Magellan will continue to hold its current interest in all formations above the Bakken, including the producing Charles and Tyler formations where all Poplar proved and probable reserves are located. It will use proceeds to continue its Charles recompletion program and evaluate shallower formations.