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(NASDAQ:BEXP) Brigham Exploration Company (BEXP) engages in the exploration, development, and production of oil and natural gas in the United States. The company owns property interests in the Onshore Gulf Coast consisting of the Vicksburg trend in Brooks County, Texas; the Frio trend in and around Matagorda County, Texas; and joint venture interests in southern Louisiana. Brigham Exploration also holds interest in Hunton Trend in the Anadarko Basin; Powder River Basin and Williston Basin in the Rocky Mountains; and west Texas. As of December 31, 2006, it had 146.5 billion cubic feet of natural gas equivalent of total estimated, proved reserves. The company sells its oil and natural gas to intrastate pipeline purchasers, operators of processing plants, and marketing companies. Brigham Exploration was founded in 1990 and is headquartered in Austin, Texas.
The Company's exploration and development activities are focused in the Rocky Mountains, Onshore Gulf Coast, the Anadarko Basin and West Texas. During the year ended December 31, 2009, the Company drilled, completed 57 gross wells, consisting of two exploratory wells and 55 development wells with an average completion rate of 98%. The natural gas is sold to various purchasers, including intrastate pipeline purchasers, operators of processing plants, and marketing companies under both monthly spot market contracts and multi-year arrangements.
COMPANY WEB SITE
http://www.bexp3d.com/
SHARES OUTSTANDING
46,127,000
COMPANY REPORTS
FORM 10-K, ANNUAL REPORT, 7-Mar-2008
http://biz.yahoo.com/e/080307/bexp10-k.html
November 23, 2011
Statoil (NYSE: STO) (OSLO: STL) and Brigham Exploration Company (NASDAQ: BEXP) have decided to make voluntary filings with the U.S. Committee on Foreign Investment in the United States (CFIUS) in connection with Statoil's previously announced acquisition of Brigham. The filing is voluntary and consistent with Statoil's policy to cooperate with all relevant governmental authorities in the United States, including CFIUS. Statoil will pay for shares consistent with the pending tender offer. Neither the filing nor completion of the CFIUS review is a condition to closing of Statoil's pending tender offer for shares of common stock of Brigham Exploration. The initial tender offer is currently scheduled to expire at midnight NYC time on November 30, 2011.
Additional Information
This communication is neither an offer to purchase nor a solicitation of an offer to sell any shares of the common stock of Brigham Exploration Company or any other securities. Statoil ASA and Fargo Acquisition Inc. have filed a tender offer statement on Schedule TO, including an offer to purchase, a letter of transmittal and related documents, with the United States Securities and Exchange Commission (the "SEC"). The offer to purchase shares of Brigham common stock (the "Offer") will only be made pursuant to the offer to purchase, the letter of transmittal and related documents filed with such Schedule TO. INVESTORS AND STOCKHOLDERS ARE URGED TO READ BOTH THE TENDER OFFER STATEMENT, AS FILED AND AS IT MAY BE AMENDED FROM TIME TO TIME, AND THE SOLICITATION/RECOMMENDATION STATEMENT REGARDING THE OFFER, AS FILED AND AS IT MAY BE AMENDED FROM TIME TO TIME, BECAUSE THEY CONTAIN IMPORTANT INFORMATION REGARDING THE OFFER. The solicitation/recommendation statement on Schedule 14D-9 has been filed with the SEC by Brigham. Investors and stockholders may obtain a free copy of these statements (when available) and other documents filed with the SEC free of charge at the website maintained by the SEC at www.sec.gov or by directing such requests to Innisfree M&A Incorporated at (877) 687-1875.
About Brigham Exploration
Brigham Exploration Company is an independent exploration, development and production company that utilizes advanced exploration, drilling and completion technologies to systematically explore for, develop and produce domestic onshore oil and natural gas reserves. For more information about Brigham Exploration, please visit our website at www.bexp3d.com or contact Investor Relations at 512-427-3444.
Forward-Looking Statement Disclosure
Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements within the meaning of the federal securities laws. Important factors that could cause our actual results to differ materially from those contained in the forward-looking statements include early initial production rates which decline steeply over the early life of wells, particularly our Williston Basin horizontal wells for which we estimate the average monthly production rates may decline by approximately 70% in the first twelve months of production, our growth strategies, our ability to successfully and economically explore for and develop oil and gas resources, anticipated trends in our business, our liquidity and ability to finance our exploration and development activities, market conditions in the oil and gas industry, our ability to make and integrate acquisitions, the impact of governmental regulation and other risks more fully described in the company's filings with the Securities and Exchange Commission. Forward-looking statements are typically identified by use of terms such as "may," "will," "expect," "anticipate," "estimate" and similar words, although some forward-looking statements may be expressed differently. All forward-looking statements contained in this release, including any forecasts and estimates, are based on management's outlook only as of the date of this release, and we undertake no obligation to update or revise these forward-looking statements, whether as a result of subsequent developments or otherwise.
Statoil Further Information
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July 26, 2011
Interested parties may dial in using the instructions below, or visit Brigham's website for the live and archived webcast at http://www.bexp3d.com. Details for the conference call are as follows:
Date & Time: Tuesday, August 9, 2011 11:00 AM ET (10:00 AM CT) Host: Bud Brigham - Chairman, CEO and President Dial-In Number: 877.398.9480 within U.S./Canada 708.290.1157 outside U.S./Canada Conference ID: 86489005 Telephone Replay Number (toll-free): 855.859.2056 Telephone Replay Available Through: August 16, 2011 Webcast Address: http://www.bexp3d.com/
April 3, 2011
Brigham Exploration Company (NASDAQ: BEXP) today announced financial results for the quarter ended March 31, 2011.
FIRST QUARTER 2011 RESULTS
Our average daily production volumes for the first quarter 2011 were 11,314 barrels of crude oil equivalent (Boe) per day, up 109% from the first quarter 2010 and down 1% from the fourth quarter 2010.
Benefiting from both our operated and non-operated drilling activity in the Williston Basin, our high value crude oil production volumes for the first quarter 2011 averaged 9,211 barrels of crude oil per day, which represents a 159% increase from that in the first quarter 2010 and up 1% from that in the fourth quarter 2010. Our high value crude oil production volumes represented 81% of our total production volumes in the first quarter 2011, as compared to 66% in the first quarter 2010 and 80% in the fourth quarter 2010.
Our production volumes in the Williston Basin for the first quarter 2011 were 9,371 Boe per day, which represents a 190% increase from that in the first quarter 2010 and a slight increase from that in the fourth quarter 2010. During March 2011, our Williston Basin volumes exceeded 10,000 Boe per day for the first time in our history.
Our first quarter production volumes included approximately 732 barrels of crude oil produced during the first quarter 2011 and added to inventory. Adjusting our production volumes for amounts included in inventory resulted in first quarter 2011 daily sales volumes of 11,306 Boe per day.
Revenues from the sale of crude oil and natural gas, including cash hedge settlements for the first quarter 2011, were up 158% to $76.0 million as compared to that in the first quarter 2010. Higher crude oil sales volumes and crude oil prices increased revenues by $37.3 million and $9.4 million, respectively. Higher natural gas sales volumes also increased revenue by $0.8 million. Lower cash hedge settlements and natural gas prices decreased revenues by $0.5 million and $0.5 million, respectively.
During the first quarter 2011, our average realized price for crude oil was $82.76 per barrel, which included a $1.27 loss from the cash settlement of our crude oil derivative contracts. This compares to an average realized price in the first quarter 2010 of $72.39 per barrel, which included a $0.30 per barrel cash loss due to the settlement of our crude oil derivative contracts. Our average realized price for natural gas inclusive of natural gas liquids in the first quarter 2011 was $6.57 per Mcf, which included a $0.96 per Mcf cash gain due to the settlement of our natural gas derivative contracts. This compares to an average realized price in the first quarter 2010 of $6.68 per Mcf, which included a $0.67 per Mcf cash gain due to the settlement of our natural gas derivative contracts.
Our first quarter 2011 production costs, which include costs for operating and maintaining (O&M expense) our producing wells, expensed workovers, ad valorem taxes and production taxes, were up $0.95 per Boe when compared to that in the first quarter 2010. The increase was attributable to a $2.37 per Boe increase in production taxes, which was driven by higher commodity prices and higher levels of production in North Dakota, which are subject to an 11.5% tax rate. This increase was partially offset by a $1.48 per Boe decrease in expensed workovers due to fewer workovers.
Our general and administrative (G&A) expenses for the first quarter 2011 decreased by $3.07 per Boe as compared to the prior year's quarter due to our higher production volumes. The per unit decrease associated with our higher production volumes was partially offset by an increase in employee compensation costs due to higher levels of employee salaries in 2011 to ensure competitive compensation levels with other oil and gas companies, and a higher number of employees due to our growth in activity in the Williston Basin.
Our depletion expense for the first quarter 2011 was $18.9 million ($18.61 per Boe) compared to $9.2 million ($19.07 per Boe) in the first quarter 2010. Our higher sales volumes increased depletion expense by $10.2 million while our lower depletion rate decreased depletion expense by $0.5 million.
Our net interest expense for the first quarter 2011 was $0.5 million higher than that in the first quarter 2010. Interest expense increased due to the September 2010 issuance of our $300 million Senior Notes due 2018 and was partially offset by an increase in our capitalized interest associated with our higher level of drilling activity in the Williston Basin.
We recorded deferred income tax expense of $0.2 million in the first quarter 2011, which consists of $0.1 million in deferred federal income tax expense and $0.1 million in deferred North Dakota state income tax expense.
Our reported net income for the first quarter 2011 was $1.6 million ($0.01 per diluted share) versus net income of $11.3 million ($0.11 per diluted share) for the same period last year. Our after-tax earnings in the first quarter 2011 excluding unrealized mark-to-market hedging losses were $33.8 million ($0.29 per diluted share) as compared to our after-tax earnings in the first quarter 2010 excluding our unrealized mark-to-market hedging gains were $8.3 million ($0.08 per diluted share). After-tax earnings excluding the above items is a non-GAAP measure and a reconciliation of GAAP net income to after-tax earnings excluding the above items is included in our accompanying financial tables found later in this release.
Through March 31, 2011, we spent $122.8 million in oil and gas capital expenditures. Capital expenditures for the first three months of 2011 and 2010 were:
Three months ended March 31, ----------------------- 2011 2010 ----------- ----------- (in thousands) Drilling $ 110,778 $ 43,606 Support infrastructure 5,264 -- Land 6,770 8,477 ----------- ----------- Oil and gas capital expenditures $ 122,812 $ 52,083 Capitalized costs 6,641 4,569 Capitalized FAS 143 ARO 178 52 ----------- ----------- Total capital expenditures $ 129,631 $ 56,704 =========== ===========
SECOND QUARTER 2011 FORECASTS
The following forecasts and estimates of our second quarter 2011 production volumes are forward-looking statements subject to the risks and uncertainties identified in the "Forward-Looking Statements Disclosure" at the end of this release. We are forecasting that our second quarter 2011 production volumes to average between 12,000 Boe per day and 14,000 Boe per day and that our crude oil volumes will comprise approximately 82% of our second quarter production volumes.
For the second quarter 2011, lease operating expenses are projected to be $7.40 per Boe based on the mid-point of our production guidance, production taxes are projected to be approximately 10.0 to 10.5% of pre-hedge crude oil and natural gas revenues, and general and administrative expenses are projected to be $3.5 million ($2.99 per Boe).
MANAGEMENT COMMENTS
Gene Shepherd, Brigham's Chief Financial Officer, commented, "As we have demonstrated over the last two years, the consistency of our drilling results continues to give us excellent visibility as to the growth in production volumes and reserves that we expect to achieve in 2011. In addition to continuing to grow our inventory of development drilling locations in western North Dakota and eastern Montana, we expect 2011 to be a year where the company benefits from significant efficiencies in our drilling and completion techniques that should positively impact our costs in the second half of 2011 and in 2012. We expect these efficiencies to help offset the higher drilling and completion costs that we have experienced in 2011. Despite the increased costs, the 10% overage factor that was part of our February budget provides adequate protection against cost overruns such that we believe that we are still operating within our original 2011 budget."
Mr. Shepherd continued, "Given our record first quarter financial performance, strong balance sheet and accelerating level of drilling activity as we enter the second quarter, we look forward to 2011 being one of the most exciting years in our company's history."
CONFERENCE CALL INFORMATION
Our management will host a conference call to discuss operational and financial results for the first quarter 2011 with investors, analysts and other interested parties on Wednesday, May 4, at 11:00 a.m. Eastern Time. To participate in the call, participants within the U.S./Canada please dial 877-398-9480 and participants outside the U.S./Canada please dial 708-290-1157. The conference ID number for the call is 62089416. A telephone recording of the conference call will be available approximately two hours after the call is completed through 11:59 p.m. Eastern Time on Wednesday, May 11, 2011. To access the recording, U.S./Canada callers dial 800-642-1687 and international callers dial 706-645-9291. The conference ID number for the call is 62089416. In addition, a live and archived web cast of the conference call will be available over the Internet at www.bexp3d.com.
We will be updating our corporate presentation prior to our conference call and will reference information contained therein. We encourage you to access the presentation in advance of the conference call. To access the presentation, go to www.bexp3d.com and click on Corporate Presentation along the left side of our home page. In addition, a copy of this press release and other financial and statistical information about the periods covered by this press release and by the conference call that will take place on Wednesday, May 4, 2011, will be available on our website. To access the press release, go to www.bexp3d.com, click on Investor Relations and then click on Press Releases. The file with a copy of the press release is named Brigham Exploration Reports First Quarter 2011 Results and is dated Tuesday, May 3, 2011. To access the other financial and statistical information that will be covered by the conference call that will take place on Wednesday, May 4, 2011, go to www.bexp3d.com, click on Investor Relations and then click on Events & Presentations. The file with the other financial and statistical information is named Financial and Statistical Information for the First Quarter 2011 Conference Call and is dated Wednesday, May 4, 2011.
ABOUT BRIGHAM EXPLORATION
Brigham Exploration Company is an independent exploration, development and production company that utilizes advanced exploration, drilling and completion technologies to systematically explore for, develop and produce domestic onshore oil and natural gas reserves. For more information about Brigham Exploration, please visit our website at www.bexp3d.com or contact Investor Relations at 512-427-3444.
FORWARD-LOOKING STATEMENTS DISCLOSURE
Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements within the meaning of the federal securities laws. Important factors that could cause our actual results to differ materially from those contained in the forward-looking statements include early initial production rates which decline steeply over the early life of wells, particularly our Williston basin horizontal wells for which we estimate the average monthly production rates may decline by approximately 70% in the first twelve months of production, our growth strategies, our ability to successfully and economically explore for and develop oil and gas resources, anticipated trends in our business? our liquidity and ability to finance our exploration and development activities? market conditions in the oil and gas industry? our ability to make and integrate acquisitions, the impact of governmental regulation and other risks more fully described in the company's filings with the Securities and Exchange Commission. Forward-looking statements are typically identified by use of terms such as "may," "will," "expect," "anticipate," "estimate" and similar words, although some forward-looking statements may be expressed differently. All forward-looking statements contained in this release, including any forecasts and estimates, are based on management's outlook only as of the date of this release, and we undertake no obligation to update or revise these forward-looking statements, whether as a result of subsequent developments or otherwise.
BRIGHAM EXPLORATION COMPANY SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) Three Months Ended March 31, ---------------------- 2011 2010 ---------- ---------- Revenues: Crude oil sales $ 69,596 $ 22,870 Natural gas sales 6,367 6,060 Hedging settlements 50 582 ---------- ---------- 76,013 29,512 Unrealized hedging gains(losses) (36,008) 3,052 ---------- ---------- 40,005 32,564 Support infrastructure 594 -- Other revenue 2 9 ---------- ---------- Total Revenue 40,601 32,573 ---------- ---------- Costs and expenses: Lease operating 7,720 4,349 Production taxes 7,698 2,508 Support infrastructure 190 -- General and administrative 3,382 3,086 Depletion of oil and natural gas properties 18,940 9,211 Depreciation and amortization 971 233 Accretion of discount on asset retirement obligations 110 105 ---------- ---------- 39,011 19,492 ---------- ---------- Operating income (loss) 1,590 13,081 ---------- ---------- Other income (expense): Interest expense, net (3,378) (2,904) Interest income 367 453 Other income (expense) 3,154 685 ---------- ---------- 143 (1,766) ---------- ---------- Income (loss) before income taxes $ 1,733 $ 11,315 Income tax (expense) benefit: Current -- -- Deferred (179) -- ---------- ---------- (179) -- ---------- ---------- Net income (loss) $ 1,554 $ 11,315 ========== ========== Net income (loss) per share available to common stockholders: Basic $ 0.01 $ 0.11 ========== ========== Diluted $ 0.01 $ 0.11 ========== ========== Weighted average shares outstanding: Basic 116,359 99,444 ========== ========== Diluted 118,522 101,357 ========== ========== BRIGHAM EXPLORATION COMPANY PRODUCTION VOLUMES, SALES VOLUMES, SALES PRICES AND OTHER FINANCIAL DATA (unaudited) Three Months Ended March 31, ---------------- 2011 2010 ------- ------- Average net daily production volumes: Crude oil (Bbls) 9,211 3,552 Natural gas (MMcf) 12.6 11.2 Equivalent crude oil (Boe) (6:1) 11,314 5,420 Total net production volumes: Crude oil (MBbls) 829 320 Natural gas (MMcf) 1,136 1,009 Equivalent oil (MBoe) (6:1) 1,018 488 % Crude oil 81% 66% Increase in inventory: Crude oil (Bbls) 732 5,012 Natural gas (MMcf) -- -- Equivalent crude oil (Boe) (6:1) 732 5,012 Average net daily sales volumes (Average net production volumes less average net daily increase in inventory): Crude oil (Bbls) 9,203 3,496 Natural gas (MMcf) 12.6 11.2 Equivalent crude oil (Boe) (6:1) 11,306 5,364 Total net sales volumes (Total net production volumes less increase in inventory): Crude oil (MBbls) 828 315 Natural gas (MMcf) 1,136 1,009 Equivalent crude oil (MBoe) (6:1) 1,018 483 % Crude oil 81% 65% Sales price: Crude oil ($/Bbl) $ 84.03 $ 72.69 Natural gas ($/Mcf) 5.61 6.01 Equivalent crude oil ($/Boe) (6:1) 74.65 59.93 Sales price including derivative settlement gains (losses): Crude oil ($/Bbl) $ 82.76 $ 72.39 Natural gas ($/Mcf) 6.57 6.68 Equivalent crude oil ($/Boe) (6:1) 74.70 61.13 Sales price including derivative settlement gains (losses) and unrealized gains (losses): Crude oil ($/Bbl) $ 40.48 $ 73.90 Natural gas ($/Mcf) 5.70 9.23 Equivalent crude oil ($/Boe) (6:1) 39.31 67.45 SUMMARY CONSOLIDATED BALANCE SHEETS (in thousands) March 31, December 2011 31, 2010 ----------- ----------- Assets: Current assets $ 323,306 $ 360,857 Oil and natural gas properties, net (full cost method) 774,557 669,356 Other property and equipment, net 47,984 42,837 Other non-current assets 15,451 12,351 ----------- ----------- Total assets $ 1,161,298 $ 1,085,401 =========== =========== Liabilities and stockholders' equity: Current liabilities $ 236,747 $ 176,545 Senior notes 300,000 300,000 Other non-current liabilities 28,634 15,586 ----------- ----------- Total liabilities $ 565,381 $ 492,131 Stockholders' equity 595,917 593,270 ----------- ----------- Total liabilities and stockholders' equity $ 1,161,298 $ 1,085,401 =========== =========== BRIGHAM EXPLORATION COMPANY SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Three Months Ended March 31, ---------------------- 2011 2010 ---------- ---------- Cash flows from operating activities: Net income (loss) $ 1,554 $ 11,315 Depletion, depreciation and amortization 19,911 9,444 Accretion of discount on ARO 110 105 Amortization of deferred loan fees and debt issuance costs 526 506 Non-cash stock compensation 747 427 Market value adjustments for derivatives instruments 36,008 (3,052) Deferred income tax expense 179 -- Provision for doubtful accounts (2) -- Other noncash items -- (1) Changes in operating assets and liabilities 7,178 7,229 ---------- ---------- Cash flows provided by operating activities $ 66,211 $ 25,973 Cash flows provided (used) by investing activities (65,525) (42,910) Cash flows provided (used) by financing activities (3,843) 632 ---------- ---------- Net increase (decrease) in cash and cash equivalents $ (3,157) $ (16,305) ========== ========== SUMMARY PER BOE DATA (unaudited) Three Months Ended March 31, ---------------------- 2011 2010 ---------- ---------- Revenues: Crude oil and natural gas sales $ 74.65 $ 59.93 Hedging settlements 0.05 1.20 Unrealized hedging gains (losses) (35.39) 6.32 Support infrastructure 0.58 -- Other revenue -- 0.02 ---------- ---------- $ 39.89 $ 67.47 ========== ========== Costs and expenses: Lease operating 7.58 9.00 Production taxes 7.56 5.19 Support infrastructure 0.19 -- General and administrative 3.32 6.39 Depletion of oil and natural gas properties 18.61 19.07 Depreciation and amortization 0.95 0.48 Accretion of discount on ARO 0.11 0.22 ---------- ---------- $ 38.32 $ 40.35 ---------- ---------- Operating income (loss) $ 1.57 $ 27.12 ========== ========== Interest expense, net of interest income (a) (2.96) (5.07) Other income (expense) 3.10 1.42 ---------- ---------- Adjusted income (loss) $ 1.71 $ 23.47 ========== ========== (a) Calculated as interest expense minus interest income divided by production for period. BRIGHAM EXPLORATION COMPANY RECONCILIATION OF GAAP NET INCOME TO AFTER-TAX EARNINGS EXCLUDING THE EFFECTS OF CERTAIN ITEMS (in thousands) Three months ended March 31, ---------------------- 2011 2010 ---------- ---------- Net income (loss) as reported $ 1,554 $ 11,315 Unrealized derivative (gains) losses 36,008 (3,052) Tax impact (3,720) -- ---------- ---------- Earnings excluding the effects of certain items $ 33,842 $ 8,263 ========== ========== Earnings without the effects of certain items represent net income excluding unrealized gains and losses on derivative contracts. Management believes that exclusion of these items enhances comparability of operating results between periods. BRIGHAM EXPLORATION COMPANY SUMMARY OF COMMODITY PRICE HEDGES OUTSTANDING AS OF MAY 3, 2011 (unaudited) 2011 2012 ---------------------- ------------------------------- Q2 Q3 Q4 Q1 Q2 Q3 Q4 ------ ------- ------- ------- ------- ------- ------- Crude Oil Costless Collars: Daily volumes Bbls/d 6,110 7,587 9,207 8,239 8,580 10,168 10,000 Floor $ /Bbl $65.68 $ 67.69 $ 70.84 $ 69.03 $ 69.46 $ 71.71 $ 73.99 Cap $ /Bbl $98.83 $103.57 $109.45 $109.07 $110.07 $114.56 $116.11 Crude Oil Floors: Daily volumes Bbls/d -- -- -- 1,500 1,500 1,500 1,500 Floor $ /Bbl $ -- $ -- $ -- $ 65.00 $ 65.00 $ 80.00 $ 80.00 Natural Gas Costless Collars: Daily volumes MMBtu/d 3,626 3,587 3,587 -- -- -- -- Floor $/MMBtu $ 5.48 $ 5.48 $ 5.48 $ -- $ -- $ -- $ -- Cap $/MMBtu $ 7.16 $ 7.16 $ 7.16 $ -- $ -- $ -- $ -- 2013 --------------- Q1 Q2 ------- ------- Crude Oil Costless Collars: Daily volumes Bbls/d 9,000 1,341 Floor $ /Bbl $ 80.38 $ 85.00 Cap $ /Bbl $125.25 $134.00 Crude Oil Floors: Daily volumes Bbls/d -- -- Floor $ /Bbl $ -- $ -- Natural Gas Costless Collars: Daily volumes MMBtu/d -- -- Floor $/MMBtu $ -- $ -- Cap $/MMBtu $ -- $ -- Hedged volumes and prices reflected in this table represent average contract amounts for the quarterly periods presented; crude oil hedge contract prices and natural gas hedge prices are based on NYMEX pricing.
Contact:
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February 24, 2011
Brigham Exploration Company (NASDAQ: BEXP) announced that it will begin its acceleration to 12 operated Williston Basin rigs in 2011. Brigham also announced micro-seismic monitoring and production results that appear to support four wells per producing horizon per 1,280 acre spacing unit, or eight total Bakken and Three Forks locations per spacing unit. Brigham announced that the Swindle 16-9 #1H, its second Montana Bakken completion, produced at an early 24-hour peak flow back rate of approximately 1,065 barrels of equivalent. Brigham also announced the completion of two additional North Dakota Bakken wells at an average early 24-hour peak flow back rate of 3,513 barrels of oil equivalent. Finally, Brigham provided an update on its drilling and completion activities in the Williston Basin.
Williston Basin Activity Accelerating to 12 Operated Rigs
Brigham announced that it plans to accelerate its Williston Basin operated rig count to 12 rigs by continuing to add an incremental operated rig every 4 months after adding its planned eighth rig in May 2011. Accelerating from eight to 12 operated rigs is anticipated to increase Brigham's drilling pace by approximately 44 gross wells per year, or approximately 29 net wells, once at the 12 operated rig level. Brigham anticipates reaching 12 operated rigs by September 2012.
Based on an accelerated level of activity in 2011, Brigham anticipates drilling approximately 66 net Williston Basin Bakken and Three Forks wells during 2011 as compared to approximately 39 net wells in 2010. Drilling capital is anticipated to be approximately $582.1 million in 2011, which incorporates a total per well cost of approximately $7.9 million plus a 10% budgeted overage.
Micro-seismic Monitoring and Early Production Supports Eight Total Wells Per 1,280 Acre Spacing Unit
Brigham announced that the interpretation of the micro-seismic data from the 18 square mile data set accumulated during the Brad Olson 9-16 #2H fracture stimulation indicates that frac wings appear to extend laterally approximately 500' on either side of the wellbore, or 1,000' in total, per well. Based on a one mile wide spacing unit, results from the micro-seismic monitoring appear to support development of at least four wells per producing horizon per 1,280 acre spacing unit, or approximately eight total Bakken and Three Forks wells per spacing unit.
Based on the increased density drilling opportunity, Brigham estimates that its de-risked drilling inventory in its Ross / Parshall / Austin and Rough Rider project areas has increased from 590 total net locations to approximately 782 total net locations.
Smart Pad Development
Brigham announced that it has initiated utilization of smart pad development in its Rough Rider and Ross project areas. Smart pad development can be implemented either by drilling multiple wells from the same location in a single spacing unit or by drilling stacked 1,280 acre spacing units, one to the north and one to the south, and drilling multiple wells in both spacing units from the same location. Smart pad development, once fully implemented, is anticipated to save approximately 10% to 20% per well on drilling and completion capital expenditures. Furthermore, smart pads are expected to reduce surface footprints and allow for consolidation of equipment and services into centralized facilities.
Drilling efficiencies are achieved by minimizing rig mobilization and demobilization times by placing wellbores in close proximity, which allows rigs to be moved without complete disassembly. Alternatively, "walking rigs," or rigs that can move short distances from wellhead to wellhead, also minimize rig related move time. To gain these additional advantages, Brigham has ordered two PACE "B" Series walking rigs from Nabors Drilling USA, LP (an operating unit of Nabors Industries, Ltd, (NYSE: NBR)) and expects to begin drilling operations with these rigs late in 2011 or early in 2012. Drilling efficiencies are also achieved by simultaneously drilling the same segment of multiple wellbores, which minimizes the amount of time spent laying down drill pipe and changing mud systems.
Completion efficiencies are achieved via the simultaneous fracture stimulation of wells in close proximity. While one well is fracing, the other well is undergoing perf and plug wire line procedures. Completion crews then alternate the fracing and wire line work between wells. Brigham has just completed its first simultaneous fracture stimulation in Ross with the Sorenson 29-32 #2H and the Cvancara 20-17 #1H. Based on initial results, it appears that approximately nine to 11 stages can be completed per day with simultaneous stimulation versus 6 stages per day while independently fracing wells.
In total, Brigham's large and concentrated acreage positions in Rough Rider and Ross provide approximately 188 operated 1,280 acre spacing units for potential smart pad development, where the company could drill as many as 1,504 gross wells. Brigham estimates that 112 of these spacing units are stacked units (two 1,280 acre spacing units that adjoin each other end to end), which provides additional drilling and completion efficiencies. Current 2011 drilling plans include 26 stacked units to be drilled in Rough Rider and Ross.
Montana Bakken Completion Results / Update
Brigham announced that the Swindle 16-9 #1H, which is located in Roosevelt County, produced approximately 1,065 barrels of oil equivalent during its early 24-hour peak flow back period. The well was completed with 19 fracture stimulation stages as the liner with swell packers did not reach total depth. Approximately 3,200' of the outermost wellbore was completed with a single open hole fracture stimulation.
Brigham is currently in the process of fracture stimulating the Johnson 30-19 #1H, which is located in Richland County, with 30 fracture stimulation stages after successfully running the liner to bottom. Also in Richland County, Brigham is in the process of recompleting the Voss 21-11H, which was purchased from another operator who drilled and completed it in August 2007 with a single fracture stimulation. The old liner was successfully removed from the wellbore and Brigham is in the process of cleaning out the entirety of the wellbore in preparation of running a liner with swell packers in order to stimulate the well with 28 stages.
Brigham is in the process of drilling the Beck 15-10 #1H in Roosevelt County. The Beck 15-10 #1H is located approximately five miles north of the Rogney 17-8 #1H, which was completed in August 2010.
Williston Basin Operated North Dakota Well Result Update
Brigham has now completed 51 consecutive long lateral high frac stage wells in North Dakota with an average early 24-hour peak flow back rate of approximately 2,858 barrels of oil equivalent per day. The following table updates Brigham's North Dakota long lateral, high frac stage well results:
Early 24-Hour Peak Flow Back Rate ------------------------ Barrels of Crude Oil County, Working Oil Natural Equivalent Well State Objective Stages Interest (1) Gas (2) (3) ------------ ------------ --------- ------ -------- ----- ------- ---------- Knoshaug 14-11 #1H Williams, ND Bakken 36 50% 3,761 4.09 4,443 Gibbins 1-12 #1H McKenzie, ND Bakken 33 55% 2,305 1.66 2,582 Average 3,513 1. Barrels of crude oil. 2. Millions of cubic feet of natural gas (MMcf). 3. Converted to barrels of oil equivalent using the ratio of six Mcf of natural gas per barrel of crude oil.
Williston Basin Operated Drilling and Completion Update
Brigham's accelerated development of its acreage in North Dakota and Montana is proceeding with four operated rigs drilling in Rough Rider, two operated rigs drilling in Ross and the aforementioned operated rig drilling in Roosevelt County, Montana. Brigham's eighth and ninth operated rigs are currently expected to arrive in May and September 2011, respectively.
Brigham currently has two wells flowing back, two wells fracing and 12 wells waiting on completion.
By mid-April, Brigham expects to add additional fracture stimulation capacity thereby providing access to two fully dedicated frac crews focused on completing Brigham operated horizontal wells in the basin. At that time, Brigham estimates that a minimum of eight wells per month will be fracture stimulated and brought on line to production due to the efficiencies gained by simultaneous stimulations.
Year-End 2010 Proved Reserves
As previously announced, Brigham increased its proved reserves by 141% to 66.8 million barrels of equivalent. Proved reserves were 78% crude oil and were 35% proved developed. During the year, Brigham drilled 44 net wells, 39 of which were located in the Williston Basin. At year-end 2010, approximately 58 net proved developed and 96 net proved undeveloped locations were booked in the Williston Basin, representing approximately 7% and 12% of Brigham's total available de-risked inventory of locations based on four well spacing per producing horizon. Revisions included approximately 0.8 million barrels of oil equivalent in conventional natural gas reserves that were removed from proved reserves as they were unlikely to be drilled within the five year development window required under SEC rules.
Brigham's reserve reconciliation is provided in the table below:
Equivalent Reserves (MMBoe) -------------------- 2010 Beginning Proved Reserves 27.7 Extensions, discoveries & other additions 39.1 Revisions of prior estimates 3.4 Purchases of minerals-in-place 0.2 Sale of minerals-in-place (0.6) Production (3.0) -------------------- 2010 Ending Proved Reserves 66.8 ====================
During 2010, Brigham spent approximately $280.1 million on drilling capital and $112.2 million on land. Proved drilling and land finding and development costs for 2010 based on additions and revisions were $9.23 per barrel of oil equivalent. Proved developed finding costs based on the aforementioned drilling capital and excluding purchases were estimated to be approximately $16.75 per barrel of oil equivalent. Brigham's operated Bakken / Three Forks proved developed finding costs were estimated to be $15.57 per barrel of oil equivalent versus $25.83 per barrel of oil equivalent for non-operated volumes.
Management Comments
Bud Brigham, the Chairman, President and CEO, commented, "We're very excited to announce the acceleration of our operated activity in the Williston Basin to 12 rigs. Our highly skilled and innovative staff has successfully and seamlessly executed our current acceleration and I believe we will continue with the successful and seamless integration of the four additional rigs contemplated with our ramp up to 12 rigs."
Bud Brigham continued, "Our staff is continuing to innovate and has focused attention on the capital cost side of the return equation given the 782 total net de-risked locations we have to drill in our Ross and Rough Rider project areas. In my opinion, the utilization of smart pad drilling will clearly enhance returns via reduced costs but will also make utilization of our service provider crews more efficient. For example, we should, with the implementation of simultaneous fracture stimulations, be able to complete additional wells with the same number of dedicated frac crews. As we've de-risked vast areas of acreage, we are moving into full scale development mode in these areas. Our team is and will continue to work diligently towards beginning to capture and quantify those efficiencies in 2011."
Bud Brigham continued, "We continue to work towards de-risking our Montana acreage with the drilling and completion of additional wells in both Roosevelt and Richland Counties. We believe the Swindle 16-9 #1H had a good outcome given the issues encountered while attempting to run our liner to bottom. We are currently fracing the Johnson 30-19 #1H, recompleting the Voss 20-11H and drilling the Beck 15-10 #1H. Furthermore, industry activity is accelerating in Eastern Montana as operators secure additional acreage and begin to drill wells."
Bud Brigham concluded, "Our numerous opportunities to improve returns by enhancing recoveries and reducing costs will be exciting initiatives in 2011. Our record 2010 reserve additions announced earlier this year already created positive operational momentum for a strong 2011. We look forward to updating our stockholders on our numerous initiatives and catalysts as we move through the remainder of 2011."
About Brigham Exploration
Brigham Exploration Company is an independent exploration, development and production company that utilizes advanced exploration, drilling and completion technologies to systematically explore for, develop and produce domestic onshore oil and natural gas reserves. For more information about Brigham Exploration, please visit our website at www.bexp3d.com or contact Investor Relations at 512-427-3444.
Forward-Looking Statement Disclosure
Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements within the meaning of the federal securities laws. Important factors that could cause our actual results to differ materially from those contained in the forward-looking statements early initial production rates which decline steeply over the early life of wells, particularly our Williston basin horizontal wells for which we estimate the average monthly production rates may decline by approximately 70% in the first twelve months of production, our growth strategies, our ability to successfully and economically explore for and develop oil and gas resources, anticipated trends in our business, our liquidity and ability to finance our exploration and development activities, market conditions in the oil and gas industry, our ability to make and integrate acquisitions, the impact of governmental regulation and other risks more fully described in the company's filings with the Securities and Exchange Commission. Forward-looking statements are typically identified by use of terms such as "may," "will," "expect," "anticipate," "estimate" and similar words, although some forward-looking statements may be expressed differently. All forward-looking statements contained in this release, including any forecasts and estimates, are based on management's outlook only as of the date of this release, and we undertake no obligation to update or revise these forward-looking statements, whether as a result of subsequent developments or otherwise.
###
January 27, 2011
Brigham Exploration Company (NASDAQ: BEXP) announced that year-end 2010 proven reserves increased 141% to a record 66.8 million barrels of oil equivalent (Boe). Brigham also announced that fourth quarter 2010 production volumes are estimated to be a record 11,384 barrels of equivalent per day (Boepd), which represents a 125% increase from the fourth quarter 2009 and a 34% sequential increase. Further, Brigham announced the completion of four high rate North Dakota Bakken wells at an average early 24-hour peak flow back rate of 3,078 Boe. To date, Brigham has completed 49 consecutive long lateral, high frac stage Bakken and Three Forks wells in North Dakota at an average early 24-hour peak flow back rate of 2,831 Boe. Finally, Brigham provided an update on its drilling and completion activities in the Williston Basin.
Year-End 2010 Proven Reserves
Brigham's proved reserves totaled a company record 66.8 million Boe at year-end 2010. Brigham grew reserves 141% during the year and replaced 1427% of its estimated 2010 production volumes. Additions including revisions increased reserves 42.5 million Boe and were primarily attributable to the Company's highly successful drilling efforts in the Williston Basin Bakken and Three Forks plays, where Brigham grew reserves 260% to 55.4 million Boe. At year-end 2010, Brigham's high value oil volumes comprised a record 78% of proved reserves as compared to 60% at year-end 2009. Proved developed reserves comprised 35% of year-end 2010 reserves, as compared to 37% at year-end 2009.
For year-end 2010, reserve calculations were based on the average first day of the month price for the prior 12 months. The prices utilized for the year-end 2010 reserve report were $79.43 per barrel of crude oil and $4.38 per Mmbtu of natural gas. Utilizing these prices, Brigham's pre-tax PV10% Value of its proved reserves was $1.1 billion, which represents a 336% increase from year-end 2009. Using strip prices as of December 31, 2010, the pre-tax PV10% Value of Brigham's proved reserves would have been $1.5 billion.
Pre-tax PV10% Value is the estimated present value of the future net revenues from Brigham's proved oil and natural gas reserves before income taxes, discounted using a 10% discount rate. Pre-tax PV10% Value is considered a non-GAAP financial measure under SEC regulations because it does not include the effects of future income taxes, as is required in computing the standardized measure of discounted future net cash flows. Brigham believes that pre-tax PV10% Value is an important measure that can be used to evaluate the relative significance of its oil and natural gas properties and that pre-tax PV10% Value is widely used by security analysts and investors when evaluating oil and natural gas companies. Because many factors that are unique to each individual company impact the amount of future income taxes to be paid, the use of a pre-tax measure provides greater comparability of assets when evaluating companies. Brigham believes that most other companies in the oil and natural gas industry calculate pre-tax PV10% Value on the same basis. Pre-tax PV10% Value is computed on the same basis as the standardized measure of discounted future net cash flows, but without deducting income taxes. The reconciliation of Brigham's Pre-tax PV10% Value to its standardized measure will be included in its Brigham's Form 10-K as the information necessary to compute the standardized measure is not yet available.
Brigham's proved reserves as of December 31, 2010 were prepared by the independent reserve engineering firm Cawley, Gillespie & Associates, Inc. in accordance with SEC guidelines.
Estimated Fourth Quarter 2010 Production
Brigham's estimated average daily production volumes for the fourth quarter 2010 were a quarterly record 11,384 Boepd, up 125% from the fourth quarter 2009 and up 34% from the third quarter 2010. Brigham's previous record quarterly production volumes were 8,509 Boepd in the third quarter 2010.
Benefiting from both its operated and non-operated drilling activity in the Williston Basin, Brigham's high value crude oil production volumes for the fourth quarter 2010 averaged 9,129 barrels of crude oil per day, which represents a 218% increase from that in the fourth quarter 2009 and a 44% sequential increase from that in the third quarter 2010. Brigham's high value crude oil production volumes represented 80% of its total production volumes in the fourth quarter 2010, as compared to 57% in the fourth quarter 2009 and 75% in the third quarter 2010.
Brigham's production volumes in the Williston Basin for the fourth quarter 2010 were 9,359 Boepd, which represents a 272% increase from that in the fourth quarter 2009 and a 45% sequential increase from that in the third quarter 2010.
Production volumes include approximately 135 barrels of crude oil per day of inventory build during the fourth quarter.
Williston Basin Operated Well Result Update
The following table updates Brigham's long lateral, high frac stage well results:
Early 24-Hour Peak Flow Back Rate -------------------------- Barrels of Oil County, Working Crude Natural Equivalent Well State Objective Stages Interest Oil (1) Gas (2) (3) ----------- ----------- --------- ------ -------- ------- ------- ---------- Lloyd 34-3 McKenzie, #1H (4) ND Bakken 31 29% 3,240 4.74 4,030 Bratcher McKenzie, 10-3 #1H ND Bakken 30 91% 3,206 2.76 3,667 M. Macklin Williams, 15-22 #1H ND Bakken 38 89% 2,312 1.34 2,534 M. Olson Williams, 20-29 #1H ND Bakken 38 91% 1,936 0.86 2,080 Average 3,078
(1) Barrels of crude oil.
(2) Millions of cubic feet of natural gas (MMcf).
(3) Converted to barrels of oil equivalent using the ratio of six Mcf of natural gas per barrel of crude oil.
(4) Represents joint venture well completed with U.S Energy Corp. (NASDAQ: USEG)
Williston Basin Operated Drilling and Completion Update
Brigham's accelerated development of its acreage in North Dakota and Montana is proceeding with five operated rigs drilling in Rough Rider and two operated rigs drilling in Ross. Brigham's eighth operated rig is currently expected to arrive in May 2011.
Brigham currently has one well flowing back, two wells fracing and ten wells waiting on completion. Brigham is currently fracing the Swindle 16-9 #1H, which is located in Roosevelt County, Montana, and will frac the Johnson 30-19 #1H, which is located in Richland County, Montana, in mid-February.
By mid-April, Brigham expects to add additional fracture stimulation capacity thereby providing access to two fully dedicated frac crews focused on completing Brigham operated horizontal wells in the basin. At that time, Brigham estimates that approximately eight wells per month will be fracture stimulated and brought on line to production.
Management Comments
Bud Brigham, the Chairman, President and CEO, commented, "In our view, the Williston Basin Bakken and Three Forks plays are the highest value resource plays in North America, and our 2010 proved reserve growth clearly demonstrates that Brigham Exploration is a technological leader in these plays. Our record 2010 reserves and production growth reflect the substantial net asset value we've created for investors in 2010. This was achieved at very attractive drilling and leasehold acquisition finding and development costs, which excludes the cost of our field level infrastructure investment, of roughly $10 per proved barrel of oil equivalent. Importantly, given that we're very early in the development of this world class resource, we estimate that we've drilled only 7% of our core de-risked locations across our approximate 205,600 net acres assuming four well spacing per producing horizon. In light of our remarkable transformational year, I want to personally commend our employees for these terrific results, the credit goes to them for their efforts to continue to innovate and be the leader in the Williston Basin."
Bud Brigham continued, "Looking ahead, given the significant drilling inventory remaining on our core acreage, our ongoing drilling to further delineate the economics of our Rough Rider Three Forks and Montana Bakken locations, the potential to increase the number of density wells per spacing unit, and the success we've achieved acquiring additional acreage, I believe that 2010 is just the first of many years of significant, low cost reserve additions for our shareholders. As other companies are striving to become liquids rich, we already have the oil manufacturing machine up and running with 80% of our production volumes driven by high value crude oil. The oil manufacturing machine is expandable as well, as we continue to engage with service providers to ramp up our rig count beyond the eight rigs we will have running by May."
Bud Brigham concluded, "In addition to our efforts to increase our drilling inventory and accelerate the development of the associated net asset value, we have internally developed a number of initiatives that we will test during 2011 to further enhance estimated ultimate recoveries. Furthermore, we are at the very early stages of investigating opportunities to reduce costs through drilling and completion efficiencies. Overall, 2011 looks to be a very exciting year and one in which we anticipate making substantial progress in our goal of 'No Oil Left Behind™.'"
Disclosure Statements
The production and financial information in the release is unaudited and subject to revision. Audited and final results will be provided in our Annual Report on Form 10-K for the year ended December 31, 2010 currently planned to be filed with the Securities and Exchange Commission by the end of February or early March 2011.
About Brigham Exploration
Brigham Exploration Company is an independent exploration, development and production company that utilizes advanced exploration, drilling and completion technologies to systematically explore for, develop and produce domestic onshore oil and natural gas reserves. For more information about Brigham Exploration, please visit our website at www.bexp3d.com or contact Investor Relations at 512-427-3444.
Forward-Looking Statement Disclosure
Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements within the meaning of the federal securities laws. Important factors that could cause our actual results to differ materially from those contained in the forward-looking statements early initial production rates which decline steeply over the early life of wells, particularly our Williston basin horizontal wells for which we estimate the average monthly production rates may decline by approximately 70% in the first twelve months of production, our growth strategies, our ability to successfully and economically explore for and develop oil and gas resources, anticipated trends in our business, our liquidity and ability to finance our exploration and development activities, market conditions in the oil and gas industry, our ability to make and integrate acquisitions, the impact of governmental regulation and other risks more fully described in the company's filings with the Securities and Exchange Commission. Forward-looking statements are typically identified by use of terms such as "may," "will," "expect," "anticipate," "estimate" and similar words, although some forward-looking statements may be expressed differently. All forward-looking statements contained in this release, including any forecasts and estimates, are based on management's outlook only as of the date of this release, and we undertake no obligation to update or revise these forward-looking statements, whether as a result of subsequent developments or otherwise.
Contact:
Rob Roosa
Finance Manager
(512) 427-3300
==///////////==
Operational Update - November 1, 2010
Brigham Exploration Company (NASDAQ: BEXP) announced the completion of three high rate Bakken wells, including the Clifford Bakke 26-35 #1H and the Abelmann 23-14 #1H at early 24-hour peak flow back rates of approximately 5,061 and 4,169 barrels of oil equivalent, respectively. In total, Brigham has completed 39 consecutive high frac stage long lateral Bakken and Three Forks wells in North Dakota with an average early 24-hour peak flow back rate of approximately 2,777 barrels of oil equivalent. Brigham also provided an update on its drilling and completion activities in the Williston Basin.
Ross Project Area Update
In Mountrail County, North Dakota, Brigham announced the completion of the Clifford Bakke 26-35 #1H, which was completed with 38 fracture stimulation stages, at an early 24-hour peak flow back rate of approximately 5,061 barrels of oil equivalent (4,438 barrels of oil and 3.73 MMcf). The Clifford Bakke 26-35 #1H is located two miles to the east of the Anderson 28-33 #1H, which was completed in August 2009 with 24 fracture stimulation stages at an early 24-hour peak flow back rate of 2,154 barrels of oil equivalent. Based on publicly available information, the Clifford Bakke 26-35 #1H appears to represent the second highest initial production rate well in the Williston Basin and Brigham now has the first, second, third and fifth highest initial production rate wells in the basin. To date, Brigham has completed eight Ross project area long lateral Bakken wells at an average early 24-hour peak flow back rate of approximately 3,988 barrels of oil equivalent. Brigham maintains an approximate 43% working interest in the Clifford Bakke 26-35#1H.
Rough Rider Project Area Update
Record Rough Rider Bakken Completion -- In McKenzie County, North Dakota, Brigham announced the completion of the Abelmann 23-14 #1H at an early 24-hour peak flow back rate of 4,169 barrels of oil equivalent (3,745 barrels of oil and 2.55 MMcf). The Abelmann 23-14 #1H was completed with 33 frac stages and, based on publicly available information, appears to represent a record initial production rate well west of the Nesson Anticline. Brigham maintains an approximate 53% working interest in the Abelmann 23-14 #1H.
Rough Rider Increased Density Pilot Project -- In Williams County, North Dakota, Brigham is in the process of flowing back the Brad Olson 9-16 #2H, which is being completed with 32 fracture stimulation stages and represents Brigham's 40th long lateral high frac stage completion. Current flow back results indicate the early 24-hour peak flow back rate will be within the range of early 24-hour peak flow back rates for other Brigham operated Rough Rider wells. Brigham hopes to be able to provide an early 24-hour peak flow back rate on its 3rd quarter 2010 conference call tomorrow morning. Brigham maintains an approximate 56% working interest in the Brad Olson 9-16 #2H, with U.S. Energy Corp. (NASDAQ: USEG) as a working interest participant.
The Brad Olson 9-16 #2H represents Brigham's first infill test west of the Nesson Anticline. By monitoring frac wing performance of the well with a deployed micro-seismic array and monitoring continued well performance, Brigham hopes to delineate the potential to drill incremental infill wells beyond the currently envisioned three wells per spacing unit. If results indicate that four to six wells may be required to effectively drain spacing units, Brigham's de-risked Rough Rider drilling inventory could increase by approximately 120 to 360 net locations, which would represent a significant net asset value enhancement event. Subject to results, Brigham plans to commence additional increased density pilots in Rough Rider and Ross in the first half 2011, including four well density units.
Additional Rough Rider Completion -- Also in Williams County, North Dakota, Brigham announced the completion of the Smith Farm 23-14 #1H, which was completed with 32 fracture stimulation stages at an early 24-hour peak flow back rate of 2,417 barrels of oil equivalent. Brigham maintains approximate 82% working interest in the Smith Farm 23-14 #1H.
Williston Basin Drilling and Completion Update
Brigham's accelerated development of its acreage in North Dakota and Montana is proceeding with three operated rigs drilling in Rough Rider, two operated rigs drilling in Ross and one operated rig drilling in Roosevelt County, Montana. A seventh operated rig is expected to arrive in mid-November, approximately two months ahead of schedule. Brigham's eighth operated rig is currently expected to arrive in May 2011.
Brigham currently has one well flowing back, two wells fracing and nine wells waiting on completion. In the first quarter 2011, Brigham expects to add additional fracture stimulation capacity thereby providing access to two fully dedicated frac crews focused on completing Brigham operated horizontal wells in the basin. At that time, Brigham estimates that approximately eight wells per month will be fracture stimulated and brought on line to production.
Management Comments
Bud Brigham, the Chairman, President and CEO, commented, "We've now drilled 39 consecutive high frac stage long lateral completions in North Dakota averaging 2,777 barrels of oil equivalent over an early 24-hour peak flow back period. The outperformance of our wells once again resulted in our exceeding the high end of our production volume guidance, and we also achieved record quarterly production volumes of 8,509 barrels of oil equivalent per day during the third quarter. Furthermore, during the third quarter, our high value oil production volumes continued to grow and represented approximately 75% of our total production volumes and 87% of our pre-hedge revenues, which drove our revenue and cash flow to record levels during the quarter. We're even more excited about the potential for strong fourth quarter production volume growth given the three wells we recently brought on line and our plans to complete approximately six wells per month in the Williston Basin during the quarter. We currently anticipate achieving between 20% and 27% sequential production volume growth during the fourth quarter and therefore expect our volumes to average between 10,200 to 10,800 barrels of oil equivalent per day."
Bud Brigham continued, "We've moved an operated rig into Montana and are currently drilling the Swindle 9-16 #1H in Roosevelt County about seven miles east of our Rogney well. We will subsequently move the rig to Richland County, Montana to drill the Johnson 30-19 #1H, which is approximately seven to eight miles northwest of our Sedlacek Trust 33-4 #1H. We're excited about the opportunity to complete two additional Montana wells early in 2011 in an effort to further de-risk portions of our approximately 105,400 net acres in the area."
Bud Brigham concluded, "Our Brad Olson 9-16 #2H and #3H, which will be completed later this year, could provide yet another potential catalyst for net asset value growth. As we've increased the number of frac stages while pumping the same amount of ceramic proppant, we potentially have decreased the length of our frac wings and increased our drainage efficiency along the length of the wellbore. By analyzing the results of our deployed micro-seismic array and ongoing monitoring of well performance, we hope to determine whether we may have the opportunity to drill more than our currently planned three wells per spacing unit. If we can drill four to six wells per spacing unit, in our Rough Rider area alone our de-risked development drilling inventory could increase by approximately 120 to 360 net wells, which would represent a significant net asset value enhancement."
Conference Call Information
Our management will host a conference call to discuss operational and financial results for the third quarter 2010 with investors, analysts and other interested parties on Tuesday, November 2, at 11:00 a.m. Eastern Time. To participate in the call, participants within the U.S. please dial 888-713-4218 and participants outside the U.S. please dial 617-213-4870. The participant passcode for the call is 21582582. Participants may pre-register for the call at https://cossprereg.btci.com/prereg/key.process?key=PVNELWLGV. Pre-registrants will be issued a pin number to use when dialing into the live call which will provide quick access to the conference. A telephone recording of the conference call will be available approximately two hours after the call is completed through 12:00 p.m. Eastern Time on Tuesday, November 9, 2010. To access the recording, domestic callers dial 888-286-8010 and international callers dial 617-801-6888. The passcode for the conference call playback is 42559492. In addition, a live and archived web cast of the conference call will be available over the Internet at either www.bexp3d.com or www.streetevents.com.
About Brigham Exploration
Brigham Exploration Company is an independent exploration, development and production company that utilizes advanced exploration, drilling and completion technologies to systematically explore for, develop and produce domestic onshore oil and natural gas reserves. For more information about Brigham Exploration, please visit our website at www.bexp3d.com or contact Investor Relations at 512-427-3444.
Contact:
Rob Roosa
Finance Manager
(512) 427-3300
=////////////=
August 3, 2010, 4:45 pm EDT
Since late April 2010, Brigham Exploration Company (NASDAQ: BEXP) has expanded its acreage position in the Williston Basin by approximately 52,800 net acres to an estimated 358,200 net acres, which represents a 17% increase in its total Williston Basin acreage. Importantly, Brigham has expanded its core acreage position by an estimated 34,000 net acres, primarily in and around its Rough Rider project area, to a total of approximately 198,400 net acres. Brigham also announced the completion of the Rogney 17-8 #1H, its first Bakken well in its Eastern Montana project area in Roosevelt County, Montana, at an early 24-hour peak flow back rate of 909 barrels of oil equivalent. Finally, Brigham announced the completion of the Michael Owan 26-35 #1H and the Sedlacek Trust 33-4 #1 at early 24-hour peak flow back rates of 2,931 and 2,695 barrels of oil equivalent, respectively.
Growth in Williston Basin Acreage
In addition to its ongoing organic leasing efforts, Brigham completed four separate acreage acquisition transactions, expanding its Williston Basin acreage position by approximately 52,800 net acres since late April to an estimated 358,200 net acres. Approximately 23,800 net acres were added to its Rough Rider project area in Williams and McKenzie County, North Dakota. In addition, approximately 9,900 net acres were added in far eastern Richland County, Montana, very proximate to Brigham's Sedlacek Trust well, which had an early 24-hour peak rate of 2,695 barrels of oil equivalent. As a result, Brigham's core acreage position west of the Nesson Anticline in Rough Rider and in far Eastern Montana has grown by approximately 27% to an estimated 156,700 net acres. An additional 300 net acres were added east of the Nesson Anticline in the Ross project area in Mountrail County, North Dakota. Together, this represents an increase of 34,000 net acres in its core acreage in the Williston Basin to approximately 198,400 total net core acres. As a result of these acreage additions, Brigham has increased its core acreage drilling locations by an estimated 81 net locations to approximately 574 total net locations.
Separate from the aforementioned core acreage additions in far eastern Richland County, Montana, Brigham added approximately 17,300 additional acres in its Eastern Montana project area further west from the Sedlacek Trust well in Richland County. The remaining 1,500 net acres acquired in Eastern Montana are located in Roosevelt County.
Initial Brigham Operated and Non-Operated Montana Bakken Discoveries
Brigham announced the completion of its operated Rogney 17-8 #1H in its Eastern Montana project area in Roosevelt County at an early 24-hour peak rate of approximately 909 barrels of oil equivalent. Given that this was Brigham's initial test in the area, the initial nine frac stages, or approximately 30% of the horizontal wellbore, were stimulated at lower frac pump rates. However, as a consequence the well produced at low initial flow rates. Brigham subsequently treated the remaining 21 frac intervals at higher frac pump rates and, when commingled with the initial nine intervals, the well produced 909 barrels of oil equivalent in an early 24 hour period. Currently the Rogney is flowing at a rate of approximately 400 barrels of oil equivalent per day.
Also in Montana and approximately 17 miles southeast of the Rogney, Brigham participated with a small working interest in the Zenergy Luke Sweetman, which was completed with 23 frac stages. The Luke Sweetman commenced production in late April at an early 24-hour peak rate of approximately 1,201 barrels of oil equivalent per day, after 100 days had produced roughly 30,000 barrels of oil and was recently producing approximately 320 barrels of oil equivalent per day. Brigham will continue to monitor the performance of the Rogney and other surrounding wells, and plans on spudding its next Montana operated well, the Gobbs 17-8, approximately five miles east of the Rogney in November.
Update on Accelerating North Dakota Bakken and Three Forks Operational Activity
Brigham announced the completion of its operated Michael Owan and Sedlacek Trust wells at early 24 hour peak flow back rates of 2,931 (2,640 Bopd and 1.75 MMcf/d) and 2,695 (2,413 Bopd and 1.69 MMcf/d) barrels of oil equivalent, respectively. Both wells are located in Brigham's Rough Rider project area. Notably, the Sedlacek Trust represents the southwestern most well to date of Brigham's acreage in its Rough Rider project area. The Michael Owan and Sedlacek Trust were treated with 33 and 30 frac stages, respectively. Brigham maintains an approximate 87% interest in the Michael Owan and an approximate 48% working interest in the Sedlacek Trust. The Sedlacek Trust was completed with U.S. Energy Corp. (NASDAQ: USEG) as well #10 under the terms of the 15 well Drilling Participation Agreement entered into last year. Brigham's interest in the wells drilled with U.S. Energy Corp. will increase after payout.
Brigham's accelerated development of its core operated acreage in its Rough Rider and Ross project areas is proceeding with five operated rigs drilling, four of which are located in Rough Rider with an additional rig located in Ross. The next operated rig is expected to arrive October 1st and is expected to drill wells in the Ross project area. Additional operated rigs are expected to arrive in January and May 2011 after which Brigham will have eight operated rigs running in the Williston Basin. In terms of operated well completions, one well is currently flowing back after frac, one well is fracing and nine wells are waiting on completion.
Access to an incremental 50% of a frac crew is expected this month and at that time the pace of Brigham operated completions is expected to accelerate. In December 2010 or January 2011, Brigham is expected to gain access to an additional 50% of a frac crew and at that time Brigham will have two fully dedicated crews fracing Brigham operated wells at all times.
Brigham is also actively constructing infrastructure in both the Rough Rider and Ross project areas. In Rough Rider, crude oil, water disposal and fresh water pipelines are being laid. It is expected that Brigham will lay approximately 70 miles of each of these lines. All lines are anticipated to be operational by the second quarter 2011. Additionally, a pipe yard is currently under construction and a water disposal well will be drilled in the near future, both near Williston, North Dakota. In Ross, water disposal lines are being laid, a water disposal well has been drilled and the disposal facility is being constructed. It's expected that the water disposal system will be operational in the next 60 days.
Management Comments
Bud Brigham, the Chairman, President and CEO, commented, "Our Land Department exceeded all expectations by delivering approximately 52,800 net Williston Basin acres to our stockholders, an estimated 34,000 of which are in our core areas, since our last acreage update in April. This acreage was delivered at an average cost of approximately $1,000 per acre, which represents a substantial discount to the per acre cost of a recent industry merger transaction in the Williston Basin and represents a significant net asset value creation event. In total, we estimate that 81 net drilling locations were added to our de-risked core drilling inventory. Our successful long lateral high frac stage drilling formula has delivered 28 consecutive high production rate North Dakota Bakken and Three Forks wells at an average early 24-hour peak rate of 2,659 barrels of oil equivalent. We believe these results have made us an operator of choice in the Rough Rider project area and have assisted in our ability to close meaningful acreage transactions over a two month period."
Bud Brigham continued, "Inclusive of our Rogney test, we now have three apparent Bakken discoveries proximal to our largest acreage block in our Eastern Montana project area. Apparently EOG has completed and is producing the Carat well immediately offsetting our acreage to the north. In addition, the Zenergy Luke Sweetman well, in which we have a small working interest, has now produced for approximately 100 days and is providing encouraging early performance to the southeast. Furthermore, well spacing activity has increased significantly in Eastern Montana with 78 units applied for by other operators at the June and August spacing hearings. The vast majority of these units are just east and north of our acreage block. We've learned a great deal from the Rogney that we will benefit from in our subsequent drilling. The initial nine frac stages were pumped at lower frac rates, reducing the productivity of that portion of the stimulation. The remaining 21 frac stages produced much better results relative to the initial nine stages. We'll of course continue to evaluate the core results of the Rogney and monitor the well's performance, and very much look forward to commencing our second operated test during the fourth quarter."
Bud Brigham continued, "Exciting activity is underway in Rough Rider with our first Three Forks well and first Bakken infill well drilling ahead. Our Three Forks well is being drilled in the same unit as our State 36-1 Bakken well, which commenced production in January 2010 at an initial rate of approximately 3,807 barrels of oil equivalent per day. Success with the State 36-1 Three Forks well would complement third party operated Three Forks discoveries proximal to Rough Rider and potentially further de-risk approximately 344 net Three Forks locations in Rough Rider. Additionally, we are currently drilling our first Bakken infill well in our Brad Olson 9-16 spacing unit and will deploy a micro seismic array to monitor the propagation of our frac wings. Monitoring frac wing performance could enable us to better understand the ultimate number of locations that are available to fully develop each spacing unit. As we have kept the amount of proppant placed in the formation for each well constant while increasing the number of frac stages, it's likely we have more effectively stimulated the near well bore area, while reducing the length of our frac wings. If we are more effectively stimulating the near well bore area, we may have the opportunity to drill more than the currently envisioned three wells per spacing unit."
About Brigham Exploration
Brigham Exploration Company is an independent exploration, development and production company that utilizes advanced exploration, drilling and completion technologies to systematically explore for, develop and produce domestic onshore oil and natural gas reserves. For more information about Brigham Exploration, please visit our website at www.bexp3d.com or contact Investor Relations at 512-427-3444.
Contact:
Rob Roosa
Finance Manager
(512) 427-3300
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Brigham Exploration Company Investor Presentation April 2008
http://www.bexp3d.com/IR_pres.pdf
Brigham Exploration Company Q4 2007 Earnings Call Transcript, 03 04 08
http://tinyurl.com/2zgzcl
DUE DILIGENCE - EXTERNAL
Williston Basin [North Dakota] sets pace for sales of oil, gas leases
http://209.157.64.201/focus/f-news/1571175/posts
"The U.S. Is Poised to Hit a New Oil Gusher" 03 17 08
By Jim Ostroff, Associate Editor, The Kiplinger Letter
http://tinyurl.com/yqbgcd
"North Dakota -- the next Saudi Arabia"
http://tinyurl.com/3ebkvh
Williston Basin - From Wikipedia
http://en.wikipedia.org/wiki/Williston_Basin
Bakken Formation - From Wikipedia
http://en.wikipedia.org/wiki/Bakken_Formation
CHARTS
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3 year chart
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=bexp&sid=0&o_symb=bexp&freq=2&time=10&x=31&y=16
