VAALCO Acquires Stake In Montana Bakken Shale Acreage

VAALCO Energy, Inc. (NYSE:EGY) signed a letter of intent with Magellan Petroleum Corporation  (NASDAQ:MPET) to acquire and develop an operating working interest in approximately 23,000 net mineral acres of oil, gas and mineral leases covering the Bakken and deeper formations in the East Poplar Unit and the Northwest Poplar Field in Roosevelt County, Montana. 

Under the terms of the acquisition, VAALCO expects to acquire a 65% working interest in the Bakken and deeper rights of the Poplar Field. VAALCO will operate its deep rights in the subject acreage in return for cash consideration at closing and its funding of 100% of the cost to drill three wells by the end of 2012, including one well by June 1, 2012, at a cost to VAALCO of approximately $5 million per well. 

Magellan will retain its current ownership for all formations above the Bakken, including the currently producing Charles and Tyler formations and will retain the remaining 35% of the Bakken and deeper rights in partnership with VAALCO.

VAALCO expects to complete the transaction during the next 60 days.

“We are very pleased to have this additional opportunity to prove up reserves in the Bakken formation and potentially in deeper formations, including the Three Forks, Nisku, and Red River formations,” said Robert Gerry, chairman and CEO of VAALCO. “We believe that this is a high quality prospect and we are optimistic that this will be a source of oil revenues to VAALCO over the next several years.” 


Source: Penn Energy
For VAALCO Information or Bakken Project Investment