Kaiser-Francis Oil Co. has paid Whiting Petroleum Corp. $107 million for a 50 percent working interest in new drilling operations within the productive Bakken formation of northwest North Dakota, officials with the companies confirmed Friday.

The deal, which closed last week, introduces Tulsa-based Kaiser- Francis to the Bakken production area.

The company is paying 65 percent of Whiting's costs for drilling the first 19 wells in the Samish field area.

In return, Kaiser-Francis will receive 50 percent of the working- interest revenues from production of up to 51 wells, according to reports.

"We're happy with the deal," Kaiser-Francis Chief Operating Officer Buddy Kleemeier said.

"We're impressed with Whiting's operation prowess, in how they're drilling and completing wells."

Whiting spokesman John Kelso called it a "fair deal" for both sides that took four months to complete.

The Kaiser-Francis payments help Denver-based Whiting retire some debt while maintaining the pace of new well construction, he added.

Of the first 18 wells either drilled or completed in the Samish field project, 11 were already producing.

Through 2008, one out of every four wells drilled by Whiting in the Bakken geological formation has initially produced at least 3,000 barrels of oil equivalent, including 4,570 BOEs out of the Richardson-Federal well, he noted.

"This gives (Kaiser-Francis) entry into arguably the best oil play currently in the lower 48 states," Kelso said.

"Those are North Slope rates."

The deal includes paying Whiting $6.4 million for acreage costs and $35.1 million to buy a 50 percent interest in the Robinson Lake gas plant and gathering system, according to reports.

Kaiser-Francis will not operate any of the Bakken wells, but will be active partners in supporting Whiting's efforts, Kleemeier said.

Privately held Kaiser-Francis employs 2,000 people nationwide and develops oil and gas properties in Oklahoma, New Mexico, Colorado and several other states.

Rod Walton 581-8457

Originally published by ROD WALTON World Staff Writer.

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