Natural Resource Acquires 5,700 Net Acres In The Sanish Oil Field, North Dakota; Producing Acres At $60,000/Acres -- October 6, 2014

The following was posted earlier. It might take a bit of time to sink in. At this point in time, with the number of producing wells, and the infrastructure in place to take away the oil and process the natural gas, a mineral acre in the Sanish oil field is worth $60,000 acre:

From Yahoo!In-Play:

Natural Resource announces acquisition of additional Williston Basin oil and gas interests for $340 mln; raises rev guidance as result : Co reported that it has signed a definitive agreement to acquire non-operated working interests in oil and gas properties located in the Bakken/Three Forks play of the Williston Basin from an affiliate of Kaiser-Francis Oil Company for $340 million, subject to customary purchase price adjustments. 

And, yes, Kaiser-Francis has been "featured" on the blog before.

The Houston Business Journal is reporting:

The properties are in the Sanish Field in Mountrail County, North Dakota, in the Bakken/Three Forks play of the Williston Basin. They are all held by production and operated by Whiting Petroleum Corp. of Denver.

The approximately 5,700 net acres include 186 producing wells and 10 wells in various stages of development and estimated average current production of approximately 3,100 barrels of oil equivalent per day.

For $340 million, the assets to be acquired:

• Estimated average current production of approximately 3,100 Boe/d
• Includes 186 producing wells and 10 wells in various stages of development
• Approximately 5,700 net acres, all held by production
• Average working interest of approximately 15%
• 100% operated by Whiting Petroleum

$340 million / 5,700 net acres (producing) = $60,000/acre?

Other back-of-the-envelope ciphering:

There are 640 acres in one section.

640 x $60,000 = almost $40 million / section.

There are 36 sections in a township.   [$1,440 million = almost $1.5 billion]

The Sanish has about 5 townships. [about $8 billion]

5,700 net acres / 1280 acres = 4.5 drilling units; at a minimum there will be 12 wells/drilling unit = 54 wells; apparently there are currently 186 producing wells in the deal and another 10 wells in various stages of development. 

Note: I often make simple arithmetic errors.