GEOI Update -- Bakken, North Dakota, USA

 A recent data point in an Abraxas presentation intrigued me.

On a bar graph "Net Bakken Acres vs $1 Million Enterprise Value," AEZ far outstripped the others, but AEZ has since been sold to Hess.

Number two on that list was GeoResources (GEOI).

Unless someone else can find it, I was unable to locate a corporate presentation at the GEOI website. [Update: "Stan" sent comment below with link to August, 2010, corporate presentation (a PDF)] -- until I get a chance to review it, here is the the GEOI 2009 annual report:

Bakken Shale Trend, Williston Basin – Our Williston Basin, Bakken Trend properties are located in Mountrail County and the adjacent counties of North Dakota. As of December 31, 2009, we owned working interests in about 106,000 gross acres. To date, our principal drilling has been conducted through a joint venture with Slawson Exploration Company, but we also participate in this area with several other operators. We have varying working interests in the properties ranging from 10% to 18%. Through the end of 2009, we have realized a 100% success rate with 41 joint venture wells drilled by the operator. We also have nominal interests in over 120 wells that are producing or are in various stages of completion with other operators. Our joint venture continues to acquire acreage in this expanding play and is currently running five drilling rigs. Pending economic conditions we expect to continue to run 4-5 drilling rigs. The majority of our wells have been and are expected to be drilled on 640 acre spacing units. In our view, the economics are attractive and acreage can be “proved up” and placed on production on an expedited basis. However, we are scheduling 1,280 acre (and some larger) spacing units and have numerous locations which may result in or require larger spacing units. In addition, consistent with our business strategy of expanding acreage positions with growth, beginning in October 2009, we initiated a significant leasing program in Williams County, North Dakota with the objective of establishing a significant operated drilling program. We also solicited industry partners to participate in the project on a promoted basis. As of March 3, 2010, we have acquired approximately 61,000 gross (42,000 net) acres and entered into agreements with industry partners to participate in future drilling and development activities. We expect to retain a 45% working interest, amounting to approximately 18,900 net acres to the Company, in a contractually specified area of mutual interest, with an average 37% net revenue interest. We are continuing to lease additional acreage in this area. Initial drilling is expected to commence in the summer of 2010. For the quarter ended December 31, 2009, the production net to our interest in the Bakken Trend was approximately 728 BOE/day and was approximately 95% oil.

In bullet-format:

• 106,000 gross acres in the Bakken; most in Mountrail and surrounding counties
• Generally participates in joint ventures with Slawson
• Working interests vary from 10 - 18 percent
• Through 2009, 100 percent success rate with 41 joint ventures drilled by the operator
• Our joint venture is currently running five drilling rigs
• We expect to continue to run four to five drilling rigs
• Mostly 640-acre spacing, but moving to more 1280-acre spacing (and some larger)
• Business strategy of expanding acreage positions began in October, 2009
• As of March, 2010, had acquired 42,000 net acres (I don't know if that's included in the "106,000" figure above; I assume it is), apparently in Williams County

On page 26:

• Texas: 112,293 gross acres; 61,311 net acres
• ND: 149,528 gross acres; 51,205 net ares
• Others: Colorado, Oklahoma, Alabama, Louisiana, Montana.

GEOI has some acreage in the Madison in Bottineau County, North Dakota (see 2009 annual report, pages 26 - 27).

95% of their production is oil.