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Update about GEOI in the Bakken.

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OilStockReport   Monday, 04/25/11 04:39:14 PM
Re: logman post# 31
Post # of 41 
Update about GEOI in the Bakken.


Quote:
GeoResources (GEOI) has 32,500 net operated acres in the Bakken. It has 12,500

net non-operated acres. This is a little less then double its Eagle Ford leasehold. Thirty two percent of proved reserves are in the Williston Basin. Its Bakken acres are located in Williams County, North Dakota. GeoResources began drilling here is September of 2010. It partnered with Slawson Exploration Company in its non-operator acreage. The majority of these acres are in Mountrail County, North Dakota. Slawson has 5 rigs running. GeoResources has 9000 acres in Roosevelt/Richland County Montana. 7,500 acres are operated and 1500 non-operated.

GeoResources operated acres in Williams County has interest in 100 spacing units. Its first well had an IP of 685 BO/D. GeoResources has one rig running and plans to add a second this summer. On average, wells will cost $5.6 million. A short lateral was used with in this 640 acre unit. GeoResources' second and third wells are 1,280 acre units with long laterals. The neighboring oil production companies have had promising results. The closest nine wells to the south had IP rates from 972 to 1947 BO/D. There are 4 to 5 rigs operating close to GeoResources leasehold. GeoResources operated acres are near good operators. The company and its results are:

Brigham Exploration (BEXP)-Between 1339 BOE/D and 2265 BOE/D
Oasis (OAS)-Between 1119 BOE/D and 2080 BOE/D
Newfield (NFX)-Waiting on results
GeoResources has 10% to 18% working interest in its non-operator acres. Eighty-five wells have been drilled here at 100% success. Evaluation of Mountrail County by Slawson and others shows the possibility of second and third wells in working units. Slawson is currently testing the Three Forks. EOG (EOG) and Whiting (WLL) have both had promising results near GeoResources' minor working interest. Bakken development economics is promising. GeoResources states a Bakken well with an EUR of 350 MBO would have:

IP of 500 BOP/D
IRR of 25% ($80/BBL & $5MCF)
IRR of 34% ($90/BBL & $5MCF)
Payout in 3 years
ROI 2.2
A Bakken well with an EUR of 700 MBO would have:

IP of 1100 BOP/D
IRR of 89% ($80/BBL & $5MCF)
IRR of 150% ($90/BBL & $5MCF)
Payout in 1.2 years
ROI 4.9
GeoResources recently increased its 2011 budget. It was raised from $88 million to $114 million. Of this $114 million, $29.5 million will be spent on the operated Bakken acres. This will be used to fund 18 wells and completions of 2010 wells. $21 million will go to Bakken non-operated acres. Next year's budget is estimated at $173 million. In its most recent operations update, GeoResources blamed weather conditions for slowing progress. On March 9th, GeoResources had proved reserves of 24 million barrels of oil equivalent. Sixty percent is oil and 74% proved developed. It produced 1,060,000 barrels of oil, and 4,789 MMCF of gas. This equates to 1,858,000 barrels of oil equivalent. Proved reserves grew 16% year over year. Oil reserves grew 26% while gas reserves increased 4%.



This is not an offer to buy or sell securities or any kind of investment advice. Oil investment carries very high risks so consult a licensed professional making any decisions. My resume is real time on Twitter @TurnKeyOil.
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