Oasis Acquires 10,000 Acres in Richland County, Montana -- Bakken, USA

I normally focus only on North Dakota, but an exception for a) Montana; and, b) Oasis.

Oasis announced it had acquired 10,000 acres in eastern Montana in Richland County. For $30 million, this works out to $3,000/acre including the production. Either I did the math wrong, or I'm missing something, or someone was eager to sell.

One reason to be eager to sell: lower capital gains taxes this year. It doesn't take a rocket scientist to see there is little movement to extend the capital gains taxes. Until I was reminded of this, I had forgotten about the Anschutz sale earlier this year.

Ten thousand acres is equivalent to about 15 sections; half of a township in North Dakota.

Richland County was where it all started. Oil was discovered in Elm Coulee, in Richland County, in 2000, and the rest is history as they say.

Wikipedia has three short paragraphs on Elm Coulee and I highly recommend folks read them to get an idea of what is going on. Some data points:

• First struck oil in Elm Coulee in 2000
• Now 350 wells there; producing 53,000 barrels of oil daily
• Most of the wells were probably fracked with one stage
• Very narrow payzone -- the middle Bakken is only about 50 feet thick here
• Elm Coulee -- just this one field -- has doubled the oil production for the state of Montana -- and, last time I looked, Montana is a huge state
• As of 2007, is the "highest-producing onshore field found in the lower 48 states in the past 56 years"

Time to go in and re-frac some of those old wells, and drill some new ones