BEXP Notes

9/1/09

BEXP Announces Strong Initial Production On The Figaro Bakken Well

• The Well: Figaro 29-32 1H- McKensie County, west of the Neeson Anticlin, its its Rough Rider area
  • 24 stage frac - Initial production of 1,895 BOEpd, not quite as big as the last well, the Anderson 28-33 which came in at 2,154 BOEpd but moving in the right direction compared to their history.
    • 1,616 Bopd and 1.7 MMcfgpd and they do have a line in place to produce the natural gas volumes
• This is the second of three deferred completions. Next up:
  • Brad Olson 9-16 (offset to the Olson, also west of the anticline), 28 stage frac being completed now….should provide the next catalyst for the stock. 
• Now drilling the BDC Farms 16-21 to the northwest - also 28 stage planned
• EURs had been thought to be in the <400,000 BOE viscinity with the sub 10 frac stage crowd, with these bigger fracs, the reserve estimates are migrating towards the 500 to 700,000 BOE arena. This makes for some very attractive finding costs, especially towards the top end of the scale of about $11 / BOE, not shabby for an oil project
• The wells in this press release are all west of the Neeson where BEXP has 100,000 net acres. They think they have 220+ Bakken locations (based on 1.5 wells per section (or 3 wells per 1,280 acre unit). If the Three Forks works on this acreage you may be looking at 400+ wells in total.  Notably, cores taken from the TFS in the original Olson well were oil saturated.
• BEXP has updated their presentation to include the results of this well. Interesting slides
  • page 11 - good map to get you oriented.
  • page 12 - EURs dependent on frac stage (lateral length) - more stages, bigger EUR. No duh but it’s a nice graph.
  • page 16 - history of the Rough Rider area drilling, trend is good
  • page 17 - note next two wells in RR area, Bard Olson and BCD Farms
  • page 18 - note the time plot of the last delayed completion well, the Mrachek to the south of this well on the west side of the Neeson. It’s engineered at 255 mm BOE by a third party reserve engineering group with an IP of less than half the Figaro well on oil only.
  • page 22 - TFS timeplot shows the Strobeck well production holding up very well; Strobecks first 30 day IP which is more important to me is nearly 1,000 BOEpd, very strong.
  • page 28 - good graph of completion costs coming down while the wells get bigger, more complex
  • page 29 - better time plot for this Figaro well and their older wells, broken out by # of frac stages
• The stock will continue to have near term catalysts in the form of big new wells on the horizon which is something much of the group lacks right now. I would suspect it will be strong for the next few days, market willing.

Update - 12/2/09

BEXP – More Rough Rider Bakken Results

• Strand 16-9 #1H – Northwest Rough Rider Area – Williams Cnty, ND
  • IP of 2,264 BOEpd on a 24 hour flow back. This is the highest rate yet announced by BEXP.
    
    • 1,947 bopd; 1.9 MMcfgpd
    • 26 stage frac, (this was planned to be a 28 stage well)
    • 21% working interest until payout to USEG on the JV wells, afterwhich the WI will increase.
  • It’s not a twin well or nearby offset but a pretty good step out, 8 miles to the southeast of the BCD farms well (IP of 1,776 BOEpd in October) and 6 miles east of the Lee 16-21 (IP of 1,554 BOEpd in November)
  • BEXP has 104,100 acres in the Rough Rider area of the Williston Basin.
  • ~ 2,000 BOEpd wells are becoming run of the mill here.
• Upcoming Wells:
  • Williston 25-36#1H -  completion before year end
    • 32 frac stages,
    • far east side of their RR acreage,
  • State 36-1 #1H – completion before year end
    • 30 frac stages,
    • far northeast side of their RR acreage,
  • Jackson 35-34 #1 H – Spud 11/10/2009, now at TD, may be complete before year end,
    • this well is not subject to the USEG JV, working interest: 58%
    • located in the heart of their acreage
  • Owan Nehring 27-34 #1H – about to spud
    • 49% WI
    • Bakken test in the western Rough Rider area
  • Liffrig 20-29 #1H – about to spud
    • 72% working interest
    • Three Forks Sanish test in the Ross Project area of Montrail Cnty, ND
    • BEXP has 36,200 net acres in the Ross area.

Nutshell: Another strong IP, some may quibble with the methodology here but their presentations show long term production is holding in ok. I don’t know if the IP testing methods are consistent from well to well but assuming there is no outright deceipt then the wells point to improvements in completion methods combined with longer laterals and more frac stages are leading to better flows for less $/ BOE delivered. There is a good map on slide 33 of their latest presentation so you can tell which wells are where,  click here. (BEXP) speaks at Cannaccord on Wednesday and at Bank of America on Thursday. These notes will be added to the BEXP notes page.