Three Peak Grasslands Wells Now Operated by KOG -- North Dakota, USA

In today's daily activity report, this little gem:

Change of operator from Peak Grasslands, LLC, to KOG:

• 18349, Sondrol 20-21H, 30-149N-98W
• 18690, Schilke 8-24H, 8-149N-98W
• 18786, Wisness 21-34H, 21-149N-98W

all in McKenzie County.

This is the story. KOG bought 14,494 net acres from Peak Grasslands back in October, 2010. It seems like I vaguely remember this deal and may have even posted something about it at the time, but now I forget. The SEC filing is here (a good example of why I am glad I am not a contract lawyer.)

Regardless, KOG picked up 14,494 net acres for $99 million in cash plus 2.75 million shares of KOG (at $4.00/share) -- yes, I remember posting that, because I was confused by the 2.75 million shares. Too much for me to remember.

Regardless, the link above is an excellent link for investors interested in KOG to review.

Let's see: 2.75 million x $4.00 = $99 million plus the $99 million in cash makes the purchase price $110 million for 14,494 acres, which comes out to $7,589/acre. Of course, some of the work has already been done, making the assets more valuable. On the other hand, some of the producing wells have already declined in production. Whatever. We're still seeing $5,000 - $10,000/acre in the better Bakken areas.