Credo Petroleum Updates Bakken and Three Forks Activities in North Dakota
17 April 2012 - 10:00PM
Five Bakken and Three Forks
Wells Placed on Production in Fiscal First Half
Nine Wells Currently
Drilling or Being Completed
Nine Additional Wells
Planned for the Remainder of Fiscal 2012
Credo Petroleum Corporation (Nasdaq:CRED), an oil and gas
exploration and production company with significant assets in the
North Dakota Bakken and Three Forks, Kansas, Nebraska, the Texas
Panhandle and Oklahoma, today updated its Bakken and Three Forks
operations.
Michael D. Davis, interim Chief Executive Officer stated, "This
press release updates our Bakken and Three Forks drilling project
where we have the potential to drill up to 400 wells in the primary
Bakken and Three Forks zones. In addition, some operators are
having success testing the "lower" Three Forks benches, which adds
additional upside to our position in the play. We currently
estimate that the Bakken and Three Forks represent about 50% of
Credo's resource potential based on only four wells per spacing
unit."
Credo has participated in 25 Bakken and Three Forks wells to
date. As shown in the tables below, 16 of the wells have been
completed and all are high rate producers. Five of the producers
were placed on production during the first half of fiscal 2012.
Nine wells are currently in various stages of drilling or
completion. Another nine wells are on the drilling schedule for the
remainder of fiscal 2012, bringing the Company's expected Bakken
and Three Forks well count to 34 by fiscal year end.
Producing—16 Wells
(Average 6.4% Working Interest) |
|
|
|
|
|
Well Name |
Operator |
Formation |
WI |
IP BOEPD |
PetroHunt 147-94-3A-10-1H |
PetroHunt |
Bakken |
18.75% |
769 |
GoodBear 21-14H |
Marathon |
Bakken |
14.61% |
1,280 |
GoodBear 31-14H |
Marathon |
Bakken |
14.61% |
1,357 |
PetroHunt 148-94-17D 1-H |
PetroHunt |
Bakken |
10.00% |
1,486 |
PetroHunt 148-94-17D 2H |
PetroHunt |
Three Forks |
10.00% |
1,697 |
Sorenson B-155-94-35-26-H1 |
Hess |
Bakken |
6.25% |
Not Released |
Sorenson B-155-94-35-26-H2 |
Hess |
Bakken |
6.25% |
Not Released |
Weisz 11-14-1H |
Brigham |
Bakken |
6.05% |
2,278 |
MHA 1-32-31H-150-90 |
QEP |
Bakken |
3.57% |
1,520 |
State of ND 10-3H |
WPX |
Bakken |
3.13% |
2,141 |
FBIR Beaks 24X-08 |
XTO |
Bakken |
3.13% |
1,168 |
Debbie Baklenko 12-26H |
Marathon |
Bakken |
1.56% |
1,352 |
Mary R. Smith 5-8H |
WPX |
Bakken |
1.56% |
821 |
Ethan Hall 6B-31-30-1H |
Enerplus |
Bakken |
1.48% |
3,732 |
Spotted Rabbit 14-23H |
WPX |
Bakken |
1.17% |
1,524 |
PetroHunt 151-94-26B-35-1H |
PetroHunt |
Bakken |
0.63% |
2,937 |
|
|
|
|
|
|
|
|
|
|
Drilling or
Completing—9 Wells (Average 11.3% Working Interest) |
|
|
|
|
|
Well Name |
Operator |
Formation |
WI |
IP BOEPD |
Fort Berthold 148-95-23D-14-1H |
PetroHunt |
Three Forks |
20.05% |
Completing |
Fort Berthold 148-94-30A-31-1H |
PetroHunt |
Three Forks |
19.37% |
Completing |
Fort Berthold 148-94-30A-31-2H |
PetroHunt |
Three Forks |
19.37% |
Completing |
Fort Berthold 153-93-18B-19-1H |
PetroHunt |
Three Forks |
12.99% |
Completing |
Fort Berthold 148-95-22D-15-1H |
PetroHunt |
Bakken |
12.24% |
Drilling |
Fettig 6-7 HC |
WPX |
Bakken |
6.73% |
Drilling |
Fort Berthold 148-95-26A-35-1H |
PetroHunt |
Bakken |
6.01% |
Drilling |
FBIR Black Medicine 24X-21 |
XTO |
Bakken |
3.13% |
Drilling |
Goodbird 36-25 HC |
WPX |
Bakken |
1.56% |
Completing |
|
|
|
|
|
|
|
|
|
|
Scheduled For Remainder
of Fiscal Year—9 Wells (Average 11.5% Working
Interest) |
|
|
|
|
|
Well Name |
Operator |
Formation |
WI |
Expected Spud
Date |
Fort Berthold 148-94-29B-32-1H |
PetroHunt |
Bakken |
18.75% |
6/15/2012 |
Fort Berthold 148-94-29B-32-2H |
PetroHunt |
Three Forks |
18.75% |
8/15/2012 |
Fort Berthold 152-93-18B-19-2H |
PetroHunt |
Bakken |
12.99% |
7/15/2012 |
Fort Berthold 152-93-18B-19-3H |
PetroHunt |
Three Forks |
12.99% |
9/15/2012 |
Fort Berthold 148-95-24C-13-1H |
PetroHunt |
Three Forks |
12.50% |
5/15/2012 |
QEP 150-92-26-27 |
QEP |
Bakken |
11.25% |
8/15/2012 |
Fettig 6-7 HB |
WPX |
Bakken |
6.73% |
5/15/2012 |
Linseth 149-95-12-13-1H |
WPX |
Three Forks |
5.30% |
6/15/2012 |
WPX 148-92-30-31 |
WPX |
Bakken |
4.08% |
9/15/2012 |
Credo's leases are located in the core of the play on the Fort
Berthold Reservation and consist of approximately 73,000 gross
(6,300 net) acres based on the Company's ownership in 57 spacing
units averaging 1,280 acres. The Company's average working
interest in the spacing units is approximately 9%. Drilling
activity in the area of the Company's Bakken and Three Forks
acreage has significantly increased as operators crack the
technical code for drilling and completion success. As a
result, the Company increased its fiscal 2012 Bakken and Three
Forks drilling budget by almost 400% to $22.4 million compared
to $5.7 million last year.
The following table illustrates Credo's estimated Bakken and
Three Forks resource potential depending on the number of wells
that are drilled in each spacing unit.
Credo Bakken and
Three Forks Resource Potential(1) |
|
|
|
|
|
Number of Prime Spacing Units |
50 |
50 |
50 |
50 |
Number of Wells per Spacing Unit(2) |
2 |
4 |
6 |
8 |
Number of Drilling Locations |
100 |
200 |
300 |
400 |
|
|
|
|
|
Estimated EUR per Well (BOE) |
600,000 |
600,000 |
600,000 |
600,000 |
Credo's Average Working Interest |
9% |
9% |
9% |
9% |
Company Net EUR per Well (BOE) |
54,000 |
54,000 |
54,000 |
54,000 |
Credo Resource Potential (BOE) |
5,400,000 |
10,800,000 |
16,200,000 |
21,600,000 |
|
|
|
|
|
(1) Data is for illustrative
purposes only and is based on management assumptions. EUR refers to
management's internal estimates of reserves potentially recoverable
from successful drilling of wells. |
|
(2) Assumes equal number of
Bakken and Three Forks wells. For example, the first column assumes
one Bakken and one Three Forks well. |
MANAGEMENT
COMMENT
"Oil is currently worth about eight times more than natural gas
on an energy equivalent basis," Davis continued. "That
unprecedented price differential validates our timely and
successful transition to becoming primarily an oil
producer. At our January 2012 first quarter-end, oil
represented 61% of Credo's production quantities and 85% of its oil
and gas sales. We expect oil to increase to around 75% of our
total production quantities in the fourth quarter of this year, as
we aggressively drill on our North Dakota, Kansas, Nebraska
and Texas Panhandle projects.
"The Bakken is the premier oil resource play in North America,
and will provide an excellent growth platform for many
years. To put our Bakken opportunity into perspective, the 25
wells we have drilled to date have only scratched the surface of
our development potential which may range up to 400
wells. Resource potential up to 21.6 million barrels adds
another growth perspective considering that our total Bakken and
Three Forks reserves at year-end 2011 were only 1.3 million
barrels, and Credo's total reserves at year-end 2011 were 4.1
million barrels.
"Our drilling projects in Kansas, Nebraska and the Texas
Panhandle are also very exciting in terms of resource potential,
diversification, economics, and contribution to growing our
Company. In Kansas and Nebraska we have several potentially
significant new field discoveries, and in the Texas Panhandle, we
are drilling our first horizontal well to test the Cleveland
formation. We will update those operating areas in future press
releases."
This press release includes certain statements that may be
deemed to be "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as
amended. All statements included in this press release, other
than statements of historical facts, address matters that the
Company reasonably expects, believes or anticipates will or may
occur in the future. Such statements are subject to various
assumptions, risks and uncertainties, many of which are beyond the
control of the Company. Investors are cautioned that any such
statements are not guarantees of future performance and that actual
results or developments may differ materially from those described
in the forward-looking statements. Investors are encouraged to
read the "Forward-Looking Statements" and "Risk Factors" sections
included in the Company's Annual Report on Form 10-K for more
information. Although the Company may from time to time
voluntarily update its prior forward looking statements, it
disclaims any commitment to do so except as required by securities
laws.
CONTACT: Michael D. Davis
Chief Operating Officer
and CEO (Interim)
or
Alford B. Neely
Chief Financial Officer
303-297-2200
Website: www.credopetroleum.com
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