On June 10, Triangle Petroleum, a small-capitalization Bakken operator, reported its first quarter fiscal 2014 results and provided operational update. Some of the operational insights discussed by the company are quite notable.
The most important is the confirmation of 160-acre downspacing feasibility in the deep portion of the Basin. The announcement may be a bellwether report which front runs a wave of downspacing test result releases by several larger operators expected later this year and in 2014.
Triangle is one of the first operators to report results of a high density drilling test in the Middle Bakken. According to the company's press release, its recent downspacing test indicates potential for 6 - 8 Middle Bakken wells per 1,280 acre spacing unit, which is equivalent to 213-160 acre density, "with no communication."
The "no communication" statement by Triangle is quite important. It suggests that there is little or no loss in well productivity and economics due to tighter development spacing. The positive downspacing resolution, if confirmed by further production history and tests by other operators, could essentially double well inventories in the most productive areas in the play, translating to significant economic value.Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or what you think you might have read here.