Credo Petroleum Completes Third Consecutive High Rate Bakken Discovery
New Well Yields 1,367 BOEPD from 24-Hour Test on Small Choke
Five Total Bakken Wells Drilled to Date
DENVER, Jan. 11, 2011 (GLOBE NEWSWIRE) -- Credo Petroleum Corporation (Nasdaq:CRED), an oil and gas exploration and production company with significant operations in the Rocky Mountain and Mid-Continent Regions, today updated its Bakken drilling activities in Dunn and Williams Counties, North Dakota.
In North Dakota's Bakken oil resource play, the company has assembled approximately 8,000 gross (6,000 net) acres in the core of the play which are located primarily on the Fort Berthold Reservation, south and west of the Parshall Field. The acreage consists of approximately 50 initial well spacing units. The company expects that more than one well will be drilled on many spacing units. The project targets horizontal drilling for the Bakken and Sanish/Three Forks formations. Vertical well depths on the company's acreage are approximately 10,000 feet and the horizontal legs are generally expected to range between 5,000 and 10,000 feet. The company's interests range from very small to 56% depending on the size of the spacing unit.
To date, five wells have been drilled on the company's acreage. Three of the wells are producing and two that are awaiting completion for production.
The company's third high rate Bakken producer was recently completed. The Petro-Hunt 3-A well was drilled on a 1,280-acre spacing unit with an approximate 10,000-foot lateral, and was fracture stimulated in 25 stages. The well flowed at a restricted rate of 1,367 barrels of oil equivalent during a 24-hour test on a small (18/64") choke with flowing casing pressure of 3,050 psi. While the well was drilled last year, the completion phase was delayed until recently due to shortages of fracture stimulation equipment. The well is located in Dunn County on the Fort Berthold Reservation about four miles southeast of the company's Petro-Hunt 17-D well. Credo owns an 18.75% working interest in the new well.
-My Take: Nice news but it only goes to show the incredible amount of reserves located on the Fort Berthold reservation in North Dakota. Credo Petroleum only owns 6,000 net mineral acres but a good majority is in locations that should produce with significant upside. If this was a Brigham well (BEXP) you would be reading about an IP rate of somewhere around 2,000 BOPD but because of the tight choke the numbers are more accurate instead of blown out of proportion as most public companies tend to want to do. As far as the stock goes after the 25% jump today I would expect a pullback. Maybe a $15 stock if oil prices hold up but there are better opportunites out there. MRO (Marathon), Williams (from Zenergy deal), and EOG also have larger amounts of acreage in the heart of the Fort Berthold play. Check out SSN when you have time (Niobrara), on a pullback you might be able to get a bargain. However, there are others with more promise. Look at my list of Bakken Stocks.Disclosure: I am long OAS, MRO.
Additional disclosure: I am also long ANFC.pk, ESPH.OB.