Salt Creek Acquisition -- NOG To Acquire 1,319 Net Acres In The Core Bakken; Nearly $40K/Acre -- April 26, 2018

Updates

Later, 4:12 p.m. CDT: think about this. NOG's market cap is $200 million. It just spent $50 million on 1,319 acres in the Bakken. 

Later, 3:49 p.m. CDT: I was looking for this data earlier. Couldn't find it easily. Forgot I had a "tag" for it. The "tag": boe/acre. 

Original Post

NOG, press release:

• will acquire 1,319 net acres in the core Bakken
• acquired from Salt Creek Oil and Gas, LLC; a subsidiary of Deutsche Rohstoff AG
• 86 gross wells; 6.5 net wells (current operators: Hess, Whiting, COP, Statoil)
• McKenzie County, southeast of Williston; right along the south side of the river
• 100% held by production
• acquiring 8.2 net future drilling locations; EURs of 1 million bbls
• acquisition to yield almost $20 million of cash from operations for 2018 (this year)
• $40 million + 6 million shrs NOG ($1.60/share)
• $50 million / 1,319 acres = $38,000 / acre
• the acreage is in some of the best acreage in the Bakken -- probably better than the Sanish, the Parshall, and as good as / better than the Grail (see graphic below) 
• what do investors think of this news? in early morning trading, just after the announcement, NOG shares are up 2.5%
• some idle calculations (mine, not from the NOG press release)
• 1,319 acres = ~ 2 sections
• 2 sections = 1280 acres
• minimum: 12 wells on 1280-acre spacing
• 12 wells x 1 million EURs = 12 million bbls
• from an old post, 2014: 1,875 boe / acre - 2014; EURs of 500,00 bbls
• 1,875 boe x 1280 acres = 2.4 million bbls
• 12 million bbls crude oil / 1280 acres = 9,375 bbls oil / acre in the core Bakken 
• 12 million bbls crude oil x $40/bbl = $480 million  

The graphic: note, the NOG press release did not have the text that I've put on this graphic. I could be way off, but I think this is fairly accurate:

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$68.63↑	4/26/2018	04/26/2017	04/26/2016	04/26/2015	04/26/2014
Active Rigs	63	48	26	84	182

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