Norway’s Statoil ASA reported it will acquire Austin-based independent Brigham Exploration Co. for $4.4 billion in a merger agreement. The deal marks Statoil’s entry into the Bakken and Three Forks unconventional oil plays in the Williston basin in North Dakota and Montana.
A cash tender offer is expected to commence within 10 business days. Providing that at least a majority of the outstanding Brigham shares are tendered and other conditions are met, Statoil expects the transaction to close during first-quarter 2012.
Plans call for Statoil to retain Brigham’s headquarters and retention plans for employees are in place.
Brigham’s board unanimously recommended its shareholders accept the offer. Ben M. Brigham, chairman, president, and chief executive officer, said all executive officers and directors had agreed to tender their outstanding shares.
Helge Lund, Statoil president and chief executive officer, noted the Norwegian company already is involved in other US unconventional oil and gas plays.
Lung said, “Statoil has step by step developed industrial capabilities through early entrance into Marcellus and Eagle Ford. Entering the Bakken and Three Forks tight oil plays and taking on operatorship represents a new significant step for Statoil.”
The Brigham transaction will provide Statoil with more than 375,000 net acres in the Williston basin. Brigham also holds interests in 40,000 net acres in other areas. Brigham’s current equity production is 21,000 boe/d, and the acreage has potential to ramp up to 60,000-100,000 boe/d equity production in 5 years.
Using horizontal drilling and hydraulic fracture stimulations, Brigham has drilled 88 consecutive producing wells in North Dakota having an average early 24 hr peak production rate of 2,800 boe/d. The company currently operates 12 rigs in the Bakken-Three Forks and aims to drill 140 wells/year.
Various sources estimate Bakken-Three Forks reserves at 5-24 billion boe covering a 38,000 sq km area, Statoil said.
Brigham and Lund both indicated their combined efforts will provide a larger balance sheet with which to develop the Williston basin assets.
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