CAVU Resources, Inc. has signed an option agreement to acquire acreage to test an initial well in northeastern Montana where companies are drilling the Bakken shale for oil. Upon successful completion of the test well, CAVU plans to acquire additional acreage in an emerging area north and west of the prolific Elm Coulee field in Richland County, MT.
CAVU has a unique position in that it is purchasing the acreage from a group that has worked with a prominent geologist who has been published for his expertise in the Bakken play in Montana. This geologist has worked the central Montana area for 21 years, gathering significant information and data that were used to identify the most attractive acreage in the area.
"We are acquiring this acreage for a number of reasons not the least of which is that this geologist believes there is between 600,000 and 750,000 barrels of recoverable oil on each well drilled on a 640 acre spacing in the middle Bakken member," said William Robinson, President of CAVU Resources, Inc. "Another key reason is that the acreage is also strategically located in the middle of acreage positions held by four other large companies, a well recently drilled by this group showed good results," he continued.
CAVU's management believes that this project offers the unique opportunity to develop a position in an area that is now being referred to as "unrisked exploration," and that is being proved by four other large oil companies.
"We believe we will enjoy the benefits of these large oil companies spending tens of millions of dollars to drill more wells, experiment with completion techniques and in general increase the value of our acreage," added Robinson.
The Bakken formation stretches from Eastern North Dakota to Central Montana in an area known as the Williston Basin. The Bakken formation is present throughout the region and is usually associated with oil and gas shows. It is a fractured formation and new technology (horizontal drilling) has allowed for great success in producing this formation.
In 2008, the US Geological Survey released a report that it had estimated mean undiscovered volumes of 3.65 billion barrels of oil, 1.85 trillion cubic feet of associated/dissolved natural gas, and 148 million barrels of natural gas liquids in the Bakken Formation of the Williston Basin Province, Montana and North Dakota.