Brigham Exploration (NASDAQ:
) is getting very positive comments this morning after the co last night issued an operations update and announced that the Strobeck 27-34 #1H well came online with an initial rate of 2,021 boe/d from the Three Forks/Sanish (TFS) zone:
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Jefferies notes the first of three wells scheduled for completion this summer achieved a new record for BEXP ... it is also the second highest
Three Forks Sanish (TFS) test in N Dakota. The Strobeck 27-34 (63% NRI; Mountrail County) flowed 2,021 boepd during the first 24 hours from the TFS. BEXP's prior record was 1,433 boepd from the Bakken. The highest report TFS test is XTO's (XTO, $35.85, Buy) Boucher 41X-21 well in Williams County at 2,571 boepd.
Demonstrates that longer laterals, more frac stages is working ... the Strobeck is 3 miles away from BEXP's Adix well which tested 892 boepd from the TFS from 11 frac stages in a 5,500' lateral. The Strobeck was completed with 20 frac stages, but 18 are effectively stimulated, in a 9,000' lateral. In effect, BEXP achieved more than double the production with 50% more frac stages. Also, the Strobeck well will be accretive to '09 reserves and will benefit from PUD-recognition. Last year the company booked only 4 million barrels in the Bakken, representing 17% of total reserves. Firm estimates that Strobeck's reserves would approximate 600 - 700,000 barrels if first month production averaged 600 bopd. This is possible considering the high initial production rate. Add in the two offset locations, even with a haircut, and Bakken reserves could be up 30% from this test alone. A 600,000 barrel well would achieve 25% threshold returns at $50 WTI assuming a $7 basis differential and $6.6 million well cost.
Next two catalysts imminent ... Jefferies expects to hear results from the Figaro 29-32 #1H (75%) in the Rough Rider area and possibly a second well in Mountrail County, the Anderson 28-33 #1 (55%), by the earnings call in the first week of August. Both wells will have 9,000' laterals and will be stimulated with 20-24 frac stages. Stimulation is scheduled for the Figaro in late-July and the Anderson in early August. Both wells would be accretive to '09 reserves.
"Rough Rider" delineation underway ...
