By Oil & Gas Financial Journal staff
Continuing its growth spurt, Houston-based Magnum Hunter Resources Corp. (NYSE: MHR) announced May 3 that it, along with its newly-acquired subsidiary NuLoch Resources Inc. and certain of NuLoch’s existing joint venture partners, has acquired 16,800 gross acres in the Williston Basin in a “bolt-on” acquisition.
With the closing of the US$327 million acquisition of Williston Basin-focused NuLoch Resources Inc., Magnum Hunter, through its indirect wholly-owned subsidiary, MHR Exchangeco Corp. acquired ownership and control of the Canadian junior oil and gas company and added to its Bakken Shale acreage.
Newly-acquired Williston Basin acreage
Now, the combined company has grown a little more. The newly-acquired Williston Basin acreage sits in Burke County, North Dakota in close proximity to a producing Sanish well, the Gustafson #29-32, where NuLoch owns an 18.6% working interest. As previously announced by NuLoch, the Gustafson #29-32 had a peak 24 hour initial production rate of 937 boe/d from the Sanish formation.
Glenn Dawson, president of NuLoch, commented, “Leveraging the success of the Gustafson #29-32 well into a now much expanded acreage position in Burke County, North Dakota where we own a larger working interest (up to 30%) is an extremely positive strategic move for our company. NuLoch has now increased the company’s net acreage position by 75% in this region alone; including one mostly contiguous block of 11,700 net acres to NuLoch’s working interest ownership position. We are currently in the process of permitting production spacing units for purposes of drilling wells with two mile horizontal laterals. Today, NuLoch has drilled two wells in Burke County, North Dakota and has an additional six wells planned for the remainder of fiscal year 2011."
Recent growth
Recent additions to the company's portfolio, including adding to its Marcellus Shale holdings, have bolstered confidence in its ability to grow production and spark institutional investor interest. In early April, Stifel, Nicolaus & Co. Inc. noted Magnum's production could grow from 2,700 boe/d at YE2010 to 6,000 boe/d at midyear with organic production growth adding the incremental 4,000 boe/d to get to the expected 10,000 boe/d 2011 exit rate.
