Dunn County and McKenzie County, ND: Bakken Shale Update

By Andrea: http://oilshalegas.com

Recently, Enerplus Resources Fund (ERF) acquired 46,500 net acres in the Bakken Shale across Dunn and McKenzie County, ND. The acquisition includes roughly 800 bbls/day of light crude oil production and around 10 million BOE:

Building on our existing Bakken land base in North Dakota, Enerplus has entered into an agreement to acquire an additional 46,500 net acres (72 sections) of land in the Fort Berthold area of Dunn and McKenzie counties in North Dakota. These lands are directly adjacent to our existing land holdings in this area and are prospective for light crude oil in the Bakken and Three Forks formations. The acquisition materially expands our current position to over 70,000 net acres (109 sections) in the Fort Berthold area, the majority of which will be operated by Enerplus with a greater than 90% working interest. Enerplus has proven expertise in this area and recent drilling results have been above expectations. With this acquisition, we now have over 210,000 net acres of undeveloped land with early stage Bakken and Three Forks potential in North Dakota and Saskatchewan in addition to our core Bakken field at Sleeping Giant in Montana.

The acquisition includes approximately 800 bbls/day of light crude oil production and proved plus probable reserves of 10 million BOE primarily attributable to the Bakken formation based upon our internal evaluation. This compliments our existing estimate of eight million BOE of unbooked proved plus probable reserves in this area. The purchase price before closing adjustments is US$456 million and will be funded through Enerplus' existing credit facility. The acquisition is expected to close in October 2010.

Enerplus has been active in the Fort Berthold area since late 2009 and over the past year we have participated in the drilling of nine operated horizontal wells, six of which have been completed to date. The lateral length of these wells has ranged from 4,300 feet with 12 frac stages for the short lateral wells to 9,000 feet with 24 frac stages for the long lateral wells.



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Production from the long lateral wells has been limited due to fluid handling capacity.



Our internal assessment of the Bakken potential in this area is approximately five to six million barrels of original oil in place per section. Based upon a drilling density of two wells per section (two long lateral wells per 1,280 acres or two short lateral wells per 640 acres) with an approximate 15% recovery factor, we estimate an additional 50 million barrels of best estimate contingent resources on our combined working interest lands in the Fort Berthold area in addition to the 18 million BOE of proved plus probable reserves. We also believe the lands are prospective for the Three Forks formation for which we have estimated four to five million barrels of original oil in place per section. However, given the limited production data available, we are in the process of evaluating the potential recoveries and development opportunity that may exist in the Three Forks.

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