Voyager Oil & Gas Inc. (OTCBB:VYOG) has signed a $7.5 million exploration and development agreement with Slawson Exploration Co. Inc. to develop Slawson's 48,000 net acres in the Denver-Julesberg Basin Niobrara Formation in Weld County, Colorado.
Oil shale deal flow heating up in Bakken, Niobrara
Slawson, ranked No. 41 in the April issue of OGFJ highlighting the top producing privately-held E&P companies, will begin a drilling program in early July with an initial series of three test wells expected to be completed by October 2010. Depending on the results of these wells, the company expects to target 57 additional locations in the area throughout 2011.
Voyager purchased a 50% working interest in the approximately 48,000 acre block and will participate on a heads-up basis on all wells drilled, as well as participate for its proportionate working interest in all additional acreage acquired in an Area of Mutual Interest consisting of all of Weld and Laramie Counties.
Voyager will fund the purchase price and initial drilling commitments out of cash on hand and cash flows from current production. Voyager remains fully funded through 2010 with no debt and approximately $12.5 million of cash on hand.
According to state records, EOG Resources' Jake well, a horizontal Niobrara discovery in Colorado's Weld County in close proximity to the Voyager acreage, flowed an average 1,750 barrels of oil and 360,000 cubic feet of gas per day for its first eight days on production in October 2009. The Jake produced more than 50,000 barrels of oil in its first 90 days.
Billings, Mont.-based Voyager Oil & Gas Inc. is focused on oil shale resource prospects in the continental US in the following five primary prospect areas:
• 24,000 core net acres targeting the Bakken formation in North Dakota and Montana. Earlier in the year, the company purchased additional acreage in the Williston Basin targeting the Bakken shale.
• 24,000 net acres targeting the Niobrara formation in Colorado and Wyoming;
• 640 net acres targeting a Red River prospect in Montana;
• 33,500 net acres in a joint venture targeting the Heath Shale formation in Musselshell, Petroleum, Garfield and Fergus Counties of Montana; and
• 65,000 net acres in a joint venture in the Tiger Ridge gas field in Blaine, Hill and Chouteau Counties of Montana.
