Attached files
file | filename |
---|---|
8-K - FORM 8-K - BRIGHAM EXPLORATION CO | c13228e8vk.htm |
EX-99.3 - EXHIBIT 99.3 - BRIGHAM EXPLORATION CO | c13228exv99w3.htm |
EX-99.1 - EXHIBIT 99.1 - BRIGHAM EXPLORATION CO | c13228exv99w1.htm |
Exhibit 99.2
NEWS RELEASE FOR IMMEDIATE RELEASE |
BRIGHAM EXPLORATION ANNOUNCES ACCELERATION TO 12 OPERATED WILLISTON BASIN RIGS, CONFIRMATION OF
INCREMENTAL DOWNSPACING OPPORTUNITY, SMART PAD DEVELOPMENT, MONTANA AND NORTH DAKOTA WELL RESULTS
AND PROVIDES AN OPERATIONAL UPDATE
Austin, TX February 24, 2011 Brigham Exploration Company (NASDAQ: BEXP) announced that
it will begin its acceleration to 12 operated Williston Basin rigs in 2011. Brigham also announced
micro-seismic monitoring and production results that appear to support four wells per producing
horizon per 1,280 acre spacing unit, or eight total Bakken and Three Forks locations per spacing
unit. Brigham announced that the Swindle 16-9 #1H, its second Montana Bakken completion, produced
at an early 24-hour peak flow back rate of approximately 1,065 barrels of equivalent. Brigham also
announced the completion of two additional North Dakota Bakken wells at an average early 24-hour
peak flow back rate of 3,513 barrels of oil equivalent. Finally, Brigham provided an update on its
drilling and completion activities in the Williston Basin.
Williston Basin Activity Accelerating to 12 Operated Rigs
Brigham announced that it plans to accelerate its Williston Basin operated rig count to 12
rigs by continuing to add an incremental operated rig every 4 months after adding its planned
eighth rig in May 2011. Accelerating from eight to 12 operated rigs is anticipated to increase
Brighams drilling pace by approximately 44 gross wells per year, or approximately 29 net wells,
once at the 12 operated rig level. Brigham anticipates reaching 12 operated rigs by September
2012.
Based on an accelerated level of activity in 2011, Brigham anticipates drilling approximately
66 net Williston Basin Bakken and Three Forks wells during 2011 as compared to approximately 39 net
wells in 2010. Drilling capital is anticipated to be approximately $582.1 million in 2011, which
incorporates a total per well cost of approximately $7.9 million plus a 10% budgeted overage.
Micro-seismic Monitoring and Early Production Supports Eight Total Wells Per 1,280 Acre Spacing
Unit
Brigham announced that the interpretation of the micro-seismic data from the 18 square mile
data set accumulated during the Brad Olson 9-16 #2H fracture stimulation indicates that frac wings
appear to extend laterally approximately 500 on either side of the wellbore, or 1,000 in total,
per well. Based on a one mile wide spacing unit, results from the micro-seismic monitoring appear
to support development of at least four wells per producing horizon per 1,280 acre spacing unit, or
approximately eight total Bakken and Three Forks wells per spacing unit.
Based on the increased density drilling opportunity, Brigham estimates that its de-risked
drilling inventory in its Ross / Parshall / Austin and Rough Rider project areas has increased from
590 total net locations to approximately 782 total net locations.
Smart Pad Development
Brigham announced that it has initiated utilization of smart pad development in its Rough
Rider and Ross project areas. Smart pad development can be implemented either by drilling multiple
wells from the same location in a single spacing unit or by drilling stacked 1,280 acre spacing
units, one to the north and one to the south, and drilling multiple wells in both spacing units
from the same location. Smart pad development, once fully implemented, is anticipated to save
approximately 10% to 20% per well on drilling and completion capital expenditures. Furthermore,
smart pads are expected to reduce surface footprints and allow for consolidation of equipment and
services into centralized facilities.
Drilling efficiencies are achieved by minimizing rig mobilization and demobilization times by
placing wellbores in close proximity, which allows rigs to be moved without complete disassembly.
Alternatively, walking rigs, or rigs that can move short distances from wellhead to wellhead,
also minimize rig related move time. To gain these additional advantages, Brigham has ordered two
PACE B Series walking rigs from Nabors Drilling USA, LP (an operating unit of Nabors Industries,
Ltd, NYSE: NBR) and expects to begin drilling operations with these rigs late in 2011 or early in
2012. Drilling efficiencies are also achieved by simultaneously drilling the same segment of
multiple wellbores, which minimizes the amount of time spent laying down drill pipe and changing
mud systems.
Completion efficiencies are achieved via the simultaneous fracture stimulation of wells in
close proximity. While one well is fracing, the other well is undergoing perf and plug wire line
procedures. Completion crews then alternate the fracing and wire line work between wells. Brigham
has just completed its first simultaneous fracture stimulation in Ross with the Sorenson 29-32 #2H
and the Cvancara 20-17 #1H. Based on initial results, it appears that approximately nine to 11
stages can be completed per day with simultaneous stimulation versus 6 stages per day while
independently fracing wells.
In total, Brighams large and concentrated acreage positions in Rough Rider and Ross provide
approximately 188 operated 1,280 acre spacing units for potential smart pad development, where the
company could drill as many as 1,504 gross wells. Brigham estimates that 112 of these spacing
units are stacked units (two 1,280 acre spacing units that adjoin each other end to end), which
provides additional drilling and completion efficiencies. Current 2011 drilling plans include 26
stacked units to be drilled in Rough Rider and Ross.
Montana Bakken Completion Results / Update
Brigham announced that the Swindle 16-9 #1H, which is located in Roosevelt County, produced
approximately 1,065 barrels of oil equivalent during its early 24-hour peak flow back
period. The well was completed with 19 fracture stimulation stages as the liner with swell packers
did not reach total depth. Approximately 3,200 of the outermost wellbore was completed with a
single open hole fracture stimulation.
Page 2
Brigham is currently in the process of fracture stimulating the Johnson 30-19 #1H, which is
located in Richland County, with 30 fracture stimulation stages after successfully running the
liner to bottom. Also in Richland County, Brigham is in the process of recompleting the Voss
21-11H, which was purchased from another operator who drilled and completed it in August 2007 with
a single fracture stimulation. The old liner was successfully removed from the wellbore and
Brigham is in the process of cleaning out the entirety of the wellbore in preparation of running a
liner with swell packers in order to stimulate the well with 28 stages.
Brigham is in the process of drilling the Beck 15-10 #1H in Roosevelt County. The Beck 15-10
#1H is located approximately five miles north of the Rogney 17-8 #1H, which was completed in August
2010.
Williston Basin Operated North Dakota Well Result Update
Brigham has now completed 51 consecutive long lateral high frac stage wells in North Dakota
with an average early 24-hour peak flow back rate of approximately 2,858 barrels of oil equivalent
per day. The following table updates Brighams North Dakota long lateral, high frac
stage well results:
Early 24-Hour Peak Flow Back Rate | ||||||||||||||||||||||||||||
Barrels of | ||||||||||||||||||||||||||||
Working | Crude | Natural | Oil | |||||||||||||||||||||||||
Well | County, State | Objective | Stages | Interest | Oil (1) | Gas (2) | Equivalent (3) | |||||||||||||||||||||
Knoshaug 14-11 #1H |
Williams, ND | Bakken | 36 | 50 | % | 3,761 | 4.09 | 4,443 | ||||||||||||||||||||
Gibbins 1-12 #1H |
McKenzie, ND | Bakken | 33 | 55 | % | 2,305 | 1.66 | 2,582 | ||||||||||||||||||||
Average |
3,513 |
(1) | Barrels of crude oil. | |
(2) | Millions of cubic feet of natural gas (MMcf). | |
(3) | Converted to barrels of oil equivalent using the ratio of six Mcf of natural gas per barrel of crude oil. |
Williston Basin Operated Drilling and Completion Update
Brighams accelerated development of its acreage in North Dakota and Montana is proceeding
with four operated rigs drilling in Rough Rider, two operated rigs drilling in Ross and the
aforementioned operated rig drilling in Roosevelt County, Montana. Brighams eighth and ninth
operated rigs are currently expected to arrive in May and September 2011, respectively.
Brigham currently has two wells flowing back, two wells fracing and 12 wells waiting on
completion.
By mid-April, Brigham expects to add additional fracture stimulation capacity thereby
providing access to two fully dedicated frac crews focused on completing Brigham operated
horizontal wells in the basin. At that time, Brigham estimates that a minimum of eight wells per
month will be fracture stimulated and brought on line to production due to the efficiencies gained
by simultaneous stimulations.
Page 3
Year-End 2010 Proved Reserves
As previously announced, Brigham increased its proved reserves by 141% to 66.8 million barrels
of equivalent. Proved reserves were 78% crude oil and were 35% proved developed. During the year,
Brigham drilled 44 net wells, 39 of which were located in the Williston Basin. At year-end 2010,
approximately 58 net proved developed and 96 net proved undeveloped locations were booked in the
Williston Basin, representing approximately 7% and 12% of Brighams total available de-risked
inventory of locations based on four well spacing per producing horizon. Revisions included
approximately 0.8 million barrels of oil equivalent in conventional natural gas reserves that were
removed from proved reserves as they were unlikely to be drilled within the five year development
window required under SEC rules.
Brighams reserve reconciliation is provided in the table below:
Equivalent | ||||
Reserves | ||||
(MMBoe) | ||||
2010 Beginning Proved Reserves |
27.7 | |||
Extensions, discoveries & other additions |
39.1 | |||
Revisions of prior estimates |
3.4 | |||
Purchases of minerals-in-place |
0.2 | |||
Sale of minerals-in-place |
(0.6 | ) | ||
Production |
(3.0 | ) | ||
2010 Ending Proved Reserves |
66.8 | |||
During 2010, Brigham spent approximately $280.1 million on drilling capital and $112.2 million
on land. Proved drilling and land finding and development costs for 2010 based on additions and
revisions were $9.23 per barrel of oil equivalent. Proved developed finding costs based on the
aforementioned drilling capital and excluding purchases were estimated to be approximately $16.75
per barrel of oil equivalent. Brighams operated Bakken / Three Forks proved developed finding
costs were estimated to be $15.57 per barrel of oil equivalent versus $25.83 per barrel of oil
equivalent for non-operated volumes.
Management Comments
Bud Brigham, the Chairman, President and CEO, commented, Were very excited to announce the
acceleration of our operated activity in the Williston Basin to 12 rigs. Our highly skilled and
innovative staff has successfully and seamlessly executed our current acceleration and I believe we
will continue with the successful and seamless integration of the four additional rigs contemplated
with our ramp up to 12 rigs.
Page 4
Bud Brigham continued, Our staff is continuing to innovate and has focused attention on the
capital cost side of the return equation given the 782 total net de-risked locations we have to
drill in our Ross and Rough Rider project areas. In my opinion, the utilization of smart pad
drilling will clearly enhance returns via reduced costs but will also make utilization of our
service provider crews more efficient. For example, we should, with the implementation of
simultaneous fracture stimulations, be able to complete additional wells with the same number of
dedicated frac crews. As weve de-risked vast areas of acreage, we are moving into full scale
development mode in these areas. Our team is and will continue to work diligently towards
beginning to capture and quantify those efficiencies in 2011.
Bud Brigham continued, We continue to work towards de-risking our Montana acreage with the
drilling and completion of additional wells in both Roosevelt and Richland Counties. We believe
the Swindle 16-9 #1H had a good outcome given the issues encountered while attempting to run our
liner to bottom. We are currently fracing the Johnson 30-19 #1H, recompleting the Voss 20-11H and
drilling the Beck 15-10 #1H. Furthermore, industry activity is accelerating in Eastern Montana as
operators secure additional acreage and begin to drill wells.
Bud Brigham concluded, Our numerous opportunities to improve returns by enhancing recoveries
and reducing costs will be exciting initiatives in 2011. Our record 2010 reserve additions
announced earlier this year already created positive operational momentum for a strong 2011. We
look forward to updating our stockholders on our numerous initiatives and catalysts as we move
through the remainder of 2011.
About Brigham Exploration
Brigham Exploration Company is an independent exploration, development and production company
that utilizes advanced exploration, drilling and completion technologies to systematically explore
for, develop and produce domestic onshore oil and natural gas reserves. For more information about
Brigham Exploration, please visit our website at www.bexp3d.com or contact Investor Relations at
512-427-3444.
Forward-Looking Statement Disclosure
Except for the historical information contained herein, the matters discussed in this news
release are forward-looking statements within the meaning of the federal securities laws. Important
factors that could cause our actual results to differ materially from those contained in the
forward-looking statements early initial production rates which decline steeply over the early life
of wells, particularly our Williston basin horizontal wells for which we estimate the average
monthly production rates may decline by approximately 70% in the first twelve months of production,
our growth strategies, our ability to successfully and economically explore for and develop oil and
gas resources, anticipated trends in our business, our liquidity and ability to finance our
exploration and development activities, market conditions in the oil and gas industry, our ability
to make and integrate acquisitions, the impact of governmental regulation and other risks more
fully described in the companys filings with the Securities and Exchange Commission.
Forward-looking statements are typically identified by use of terms such as may,
will, expect, anticipate, estimate and similar words, although some forward-looking
statements may be expressed differently. All forward-looking statements contained in this release,
including any forecasts and estimates, are based on managements outlook only as of the date of
this release, and we undertake no obligation to update or revise these forward-looking statements,
whether as a result of subsequent developments or otherwise.
Contact:
|
Rob Roosa, Director of Finance and Investor Relations | |
(512) 427-3300 |
Page 5