BEXP has a new corporate presentation. (Note: the abbreviation on slide 3, "HBP," stands for "held by production." A lease is generally good for three-to-five years; if no wells are drilled, or if wells are dry, the leases expire at the end of the stated period. However, if there is production from a well affected by a certain lease, the terms of that lease last as long as the well is productive.)
I went through the slides pretty quickly and will look at them more closely later on. However, two things jump out me, both on slide 9 (of 35 slides).
On slide 9, BEXP says it will accelerate its drilling program by doubling the number of rigs it has in the Bakken. BEXP said it added a rig in May, 2010, and would add another rig every four (4) months after that. The slide then shows how this will accelerate their drilling program.
The second thing that jumps out at you, again on the same slide: even with a doubling of rigs (up to eight rigs), BEXP will still be drilling wells in the Bakken through 2020 -- that's ten years from now! That jibes with the "Basic Analysis of the Bakken," in which the authors state it will take until 2030 to complete all the drilling. Slide 5 of the BEXP presentation says its wells have an economic lifespan of 35 to 39 years.
It should be noted that this "analysis" was for the Bakken formation only, and did not include other formations.
I know I am way too optimistic about all this, but unless one thinks "we" will no longer be using oil in the near future, I feel more and more strongly that one could put together a very good portfolio to last a lifetime focusing on companies in the Bakken. "Legacy" wells keep producing -- for how long, we don't yet know; and, there is one-to-two decades of drilling yet.
Some wells drilled decades ago continue to produce, which I assume will also be true for some Bakken wells. A "monster well," the Dinsdale well was drilled in 1996 and is still producing as just one example.
You Go Guy
ReplyDelete