Brigham Exploration Company announced the high rate completion of its Carkuff 22 #1H Bakken well in its Ross Area at an early flowing rate of 1,110 barrels of oil per day, and that its Williston Basin oil production has grown to an estimated current net rate of approximately 1,500 barrels of oil per day. The company also announced that completion operations are underway on its Kvamme 2 #1H and Payara #1-21H in the Parshall/Austin Area, that it's preparing to commence its first Three Forks test, and that it has apparently drilled its third consecutive successful well in its Southern Louisiana joint venture.
Growing Bakken Oil Production
Since early 2008, Brigham has drilled continuously with one rig in the accelerating Williston Basin Bakken play. The company's net production in the Williston Basin has grown from an approximate average of 100 barrels of oil per day in December 2007 to roughly 500 net barrels of oil per day in June 2008. As a result of a number of recent completions, Brigham's current Williston Basin daily net production is estimated to be approximately 1,500 barrels of oil per day.
Bud Brigham, the Chairman, President and CEO stated, "With one rig running continuously we've grown long life predominantly oil reserves and production in the Williston Basin steadily during the year. Our Mrachek 15-22 #1H, Manitou State 36 #1H, Johnson 33 #1H and Carkuff 22 #1H have elevated our current net production in the Williston Basin to roughly 1,500 barrels of oil per day. In the prolific Parshall/Austin area we currently have the Kvamme 2 #1H and the Slawson operated Payara #1-21H completing, which should be followed by the EOG operated Austin 25-35 1H and Austin Wayzetta 13-01H wells. These potentially high production rate wells should commence production to sales over the next sixty to seventy five days. Further, our second operated rig is expected to commence by the end of September, and as a result we expect to double our operated completions from roughly one gross operated well per month to two gross operated wells per month."
Bud Brigham continued, "Given current commodity prices these growing oil volumes generate substantially more revenue and cash flow per Mcf equivalent than do our gas volumes. During the second quarter, utilizing a 6:1 conversion, a Mcf equivalent of oil generated roughly 75% more revenue than a Mcf of natural gas. Therefore, our current Williston Basin oil production of over 1,500 net barrels of oil per day, which on a 6:1 conversion is 9 MMcf of natural gas equivalents per day, would generate revenue comparable to approximately 15.75 MMcf per day of natural gas production. We're adding more valuable production in this basin, with substantially longer reserve lives, relative to our conventional Gulf Coast natural gas production, and we're doing so very consistently."
Mountrail County Bakken Completions
Brigham successfully drilled and recently stimulated the Carkuff 22 #1H, which flowed approximately 1,110 barrels of oil and an estimated 400 to 500 Mcf of natural gas up 7.5 inch casing over the last 24 hours. Brigham's prior completion in the Ross Area, the Manitou State 36 #1H, was recently put on pump and has been producing approximately 240 barrels of oil per day. Both wells are in the Ross Area, where Brigham controls approximately 27,000 net acres. Assuming 320 acre spacing the company could drill approximately 84 net wells in the Ross Area.
Bud Brigham stated, "Based on its early performance, the Carkuff 22 #1H appears to be our strongest well drilled to date. It represents our eleventh horizontal completion in the Bakken play. The production performance we've seen from our drilling to date has improved significantly over time, almost on a well by well basis. Operational enhancements, such as more fracture stimulations per well, are having a positive impact on our results."
Mountrail County Parshall/Austin Area Drilling
Brigham is currently completing the Kvamme 2 #1H in the prolific Parshall/Austin Area. The Kvamme 2 #1H encountered good drilling shows, and is expected to be stimulated in mid to late August.
Brigham is also participating in a non-operated role in three significant Parshall/Austin area wells that are currently completing, currently drilling or expected to spud in the near future. Brigham retains an 18% working interest in the Slawson Payara #1-21H, located approximately three miles west of the Parshall Field. The Slawson Payara #1-21H apparently encountered good drilling shows, with completion operations underway. In addition, Brigham is participating with a 25% working interest in the currently drilling EOG operated Austin 25-35H. Brigham retains a 25% working interest in the Austin 25-35H, which is a south offset to EOG's 3,060 barrel of oil per day Austin 8-26H well. Results for the Slawson Payara #1-21H and the EOG Austin 25-35H wells are expected in late August and September, respectively.
One mile to the southeast of the EOG Austin 25-35H, Brigham expects to retain a 25% working interest in the EOG operated Wayzetta 13-01H in section 1 of T153N-R90W. The EOG Wayzetta 13-01H is reportedly expected to commence on August 10th. Other operators are continuing to accelerate drilling in the Parshall/Austin Area, where Brigham controls approximately 8,700 net acres. Assuming 320 acre spacing, the company could drill approximately 27 net wells in the Parshall/Austin Area.
Planned Horizontal Three Forks Well
In August, Brigham plans to commence the Adix 25 #1H, its first horizontal Three Forks well. The Adix 25 #1H is located on the eastern edge of our Ross Area, in section 25 of T155N-R92W, with results anticipated in early October. In the North Stanley Area, Brigham may also drill the Afseth 34 #1-H in the Three Forks. The Afseth 34 #1-H is located in section 34 of T158N-R91W, and is currently scheduled to commence in November.
Bud Brigham stated, "We're eager to drill our first Three Forks well in Mountrail County, particularly given the recent positive drilling results from other operators in the area. On the western edge of our Ross Area, Encore recently announced an apparent 1,100 barrel of oil per day Three Forks discovery. Other apparent Three Forks discoveries have been drilled by another operator to the north and northeast of the Ross Area, which is also to the west and northwest of our North Stanley Area. In addition, yesterday Fidelity announced a Three Forks discovery flowing 634 barrels of oil per day. The Fidelity Domaskin 11-29H is located in section 29 of T154N-R92W, roughly four miles south from the edge of our 27,000 net acres in the Ross Area, and about seven miles south-southwest of our Adix 25 #1H location."
Bud Brigham continued, "While we're very busy converting our Williston Basin acreage to proved Bakken reserves and net asset value, the Three Forks drilling is a potential 'double down' in net asset value in this play. Three Forks drilling by other operators in the area is beginning to demonstrate the potentially vast geographic breadth of this play, and the quality of the early production. Thus far, our approximate 93,000 net acres east of the Nesson Anticline, and our estimated 100,000 net acres west of the Nesson Anticline in Williams and McKenzie Counties North Dakota, are the most proximal to the recent Three Forks discoveries. However, Three Forks wells are evidently planned by other operators for eastern Montana, where we control another 100,000 net acres. We believe that all of our 293,000 net acres in the play could be prospective for the Three Forks."
Third consecutive Southern Louisiana Joint Venture Discovery - Brigham successfully drilled and is currently completing its third consecutive joint venture well. The Breton Sound SL 19054 #1 encountered 60 feet of apparent pay. Approximately 15 feet of the pay has apparent porosities greater than 20%, while 45 feet of apparent pay has porosities ranging from 18 to 20%. Production testing operations are underway, and the well is expected to be producing to sales by late October.
Brigham recently production tested its second joint venture discovery, the Chandeleur Sound SL 19312 #1, at a rate of approximately 2.7 MMcf of natural gas per day. Production to sales is expected in November. The Company's fourth and fifth joint venture wells, the Romere Pass BLM 013045 #1 and the Tiger Pass SL 18877 #1, are expected to commence in either September or October. Brigham plans to drill its sixth prospect as part of its Southern Louisiana joint venture with Clayton Williams Energy Inc. (NASDAQ: CWEI) in early 2009.
Commencement of Bayou Postillion Cotten Land #5 - Brigham is currently commencing the Cotten Land #5, a twin to Brigham's high production rate Cotten Land #3 discovery. The Cotten Land #3 encountered two apparent high quality pay intervals with 30 feet and 50 feet of estimated pay. The lower 30 foot pay interval was completed in March 2007 and produced at rates as high as 29 MMcfe per day, has produced approximately 9.5 Bcfe to date, and is currently producing approximately 10.1 MMcfe per day. The Cotten Land #5 targets the as yet unproduced upper 50 feet of apparent pay, with results expected in October.