Williams (WMB) Completes Bakken Purchase -- Bakken, North Dakota, USA

Update

June 27, 2011: Dakota-3 LLC is a subsidiary of WMB.

Original Post

Link here.

Reported earlier, but I think this is first time that I saw the seller listed as Dakota-3 LLC.

Maybe it was there the first time, and I just forgot. Yes, here it is, my original posting on this purchase, and at the time, the seller was listed as "private." The acreage represents seven (7) percent of the Fort Berthold Indian Reservation.

Anyway, 85,800 acres and assets for $925 million cash. Assets include three rigs; Williams plans to have six rigs by end of 2012. Acreage alone, that works out to about $11,000/acre -- but of course the assets have to be considered. But $11,000/acre is in the ballpark of $5,000 to $12,000/acre in this part of the Bakken.

Coastal Caribbean has about 8,000 acres in this part of the Bakken and market cap for that company is $3 million. I'm doing this from memory, so I could be wrong. Update: I am wrong; see comments below. An undated Coastal website says it has 8,000 acres in North Dakota (well down from the 25,000 acres it said it had in 2005; in addition, other than saying the acreage is in southwestern North Dakota, I have no additional information where it may be located. If I remember, I will remove this entire paragraph in a few days since it has nothing to do with the Williams acquisition.

(So, the obvious question is: who was backing Dakota-3 LLC to begin with? Williams?)

Four (4) New Permits -- North Dakota, USA

Producers: Oasis, BEXP, SM, XTO

Fields: Bull Butte, Todd, Heart Butte and West Ambrose

EU Seeks Answers On Snow Nightmare -- Not a Bakken Story

That's the headline: EU Seeks Answers For Snow Nightmare

I can't make this stuff up. As expected "they" are blaming the current snowstorm and record cold spell on global warming -- too much water vapor (not CO2 this time). Water vapor is a much bigger component of greenhouse gases than CO2.

The snow nightmare is not unexpected. When governments spend a decade planning for global warming while failing to prepare for a more likely scenario, this is not a surprise. Anyone with a Farmer's Almanac would have known that winter storms would be a bigger issue than global warming. Sort of reminds me of the fable of the ant and the grasshopper.

Just saying.

For Newbies and Investors: The Record Snow In Bakken Country Will Impact Production Targets -- North Dakota, USA

The fourth quarter production numbers are not going to look good. More on this later, perhaps, but I've opined about it earlier -- within the last day or so.

It's hard to say how these production numbers will affect share price. Share prices are moving up with price of oil and with expectation that proved reserves will continue to increase.

Share prices will move down if investors do not understand the reason for the impact is due to a temporary event.

My hunch: there may be a buying opportunity in January/February for those interested in investing in the Bakken. Just a hunch.

If someone wants to understand how production numbers can throw a wrench in one's investing plans, look at what happened to WHX in the third quarter when production numbers were not met due to closed Enbridge pipeline following a spill. EOG took a shellacking, also, but for different reasons.

I think the oil spill actually helped WHX in the long run; that's a trust and will end when it sells a pre-determined amount of oil. Oil was selling for significantly less this summer when the spill occurred than now. I assume most oil is sold on contract, so it may not have amounted to a hill of beans, or a cup of oil, but just a random thought, while I'm rambling.

Another One To Watch -- In Renville County

More on this later, but this one is yet another well to watch.

• 19472, Renegade, A Trout 6H 3-14

Important well; one of first wells in this area this boom

See comments below for update.

I follow Renegade at this page: http://milliondollarway.blogspot.com/2009/10/bakken-other-producers.html.
At some point, Renegade may get its own page. Smile.