Link here.
KOG announced that it has entered into a definitive purchase and sale agreement with a private oil and gas company to acquire Bakken/Three Forks leasehold and producing properties in the Williston Basin.Other data points:
The purchase price for the leasehold interests and associated assets is approximately $85.5 million, which will be paid through the issuance of 2.5 million common shares of Kodiak and cash. Kodiak will also assume the Seller's contract for a new build drilling rig and will reimburse the Seller for Seller's $2.5 million cash deposit on the rig. Kodiak expects to fund the cash portion of the of the purchase price with available cash balances and borrowings under its credit facilities.
- 25,000 net acres
- 200 boep currently
- 400 net, largely de-risked, undrilled locations
- 1 new rig ($2.5 million cash deposit on the rig)
- $85,500,000 / 25,000 net acres --> $3,420/acre and that's without the current production and a new rig. Maybe someone will correct me if my calculations are wrong
- The price/acre is full price for Bakken, but not extravagant; remember, the bonuses paid to the state of core Bakken acreage is $3,000 - $6,000/acre
- The acreage is in McKenzie County, one of the four core Bakken counties: Williams, McKenzie, Dunn, Mountrail
- Almost no stock dilution: only 2.5 million more shares to be issued; currently 180 million outstanding
- KOG will have 5 rigs by end of the year
- New rig is built to "Bakken pad" specifications -- with skid package tailored for pad drilling
- KOG to add ~ $10 million to 2011 CAPEX
- Total 2011 CAPEX: $230 million
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