QEP Operational Update In North Dakota; At $40,000/Undeveloped Acre It May Have Been A Bargain -- Zeits; EURs over 1 Million Bbls

Flashback: here was the deal. 


Updates

June 7, 2013: Richard Zeits at SeekingAlpha provides more analysis of QEP's operational results.

Yesterday after the market close, QEP Resources (QEP) provided an update on its Bakken operations. The remarkably strong South Antelope results were well worth waiting for and confirm the stand-out quality of this recently acquired property. In retrospect, the company's last year's South Antelope transaction may prove to be one of the most notable "bargain" acquisitions in the Bakken's history, despite the deal's head-turning $1.4 billion price tag (as a reminder, QEP acquired 27,600 net acres for $1.4 billion in what remains one of the highest-valued acreage purchases in North America - the transaction was priced at an implied ~$40,000 per undeveloped acre).

EURS: While it is impossible, this early in the production history, to have a meaningful EUR estimate for QEP's newly reported wells, EURs in the 1.3-1.5 million barrels of equivalent per well certainly cannot be ruled out. As a reminder, at the time of the acquisition, the 32 high-EUR South Antelope wells had EUR averages of 1,160 MBoe for the Middle Bakken completions and 990 MBoe for the Three Forks completions.

Original Post

From the company's press release (dynamic link; it will change / break over time). QEP Resources, Inc. provides an update to operating results for the second quarter 2013:

• QEP has completed and turned to sales its first four-well pad on the recently acquired South Antelope property in the Williston Basin of North Dakota. The four wells had an average 24-hour gross initial production rate of 3,598 barrels of oil equivalent per day (boepd) per well (3,929 boepd post processing), including the first two QEP-operated Bakken Formation wells completed at South Antelope that had an average 24-hour initial production rate of 4,174 boepd per well (4,584 boepd post processing). 
• The company has also completed nine new wells (four Bakken and five Three Forks) on two QEP-operated multi-well pads on the Fort Berthold Indian Reservation. The new wells had an average 24-hour gross initial production rate of 2,379 boepd per well (2,573 boepd post processing). 
• A fifth company-operated rig is currently moving onto location on the South Antelope property and is expected to commence the first well on a multi-well pad by mid-June. With the addition of this rig, QEP will have eight company-operated drilling rigs active in the Williston Basin. 
• Construction of QEP Field Services' 10,000 barrel-per-day Blacks Fork fractionator expansion is nearing completion and commissioning and startup is expected to commence in early June. 

Without the permits/well file numbers, I can't confirm the specific wells, but that information will come out over time. I think QEP is talking about the "Helis Grail" oil field QEP recently acquired from Helis. [For newbies: the "Helis Grail" is an inside joke; a play on words. The Grail oil field is a very, very good oil field, "owned" by Helis before bought by QEP. The "Helis Grail" is a very apt name.]

QEP's corporate presentation can be found here.  QEP's "South Antelope" prospect is on western edge of the reservation and includes the Grail oil field.

This gives you some idea how active this area is:

Some of the wells to the west are in the Croff oil field, not the Grail. These wells lie outside the reservation which is immediately to the east, just outside the image.

See also the nice wells QEP reported today.