Energy 11 Operating Co. To Buy 11.5% Interest in Wells, Future Development Locations

Energy 11 Operating Co. LLC entered into an interest purchase agreement with Kaiser-Whiting LLC for the potential purchase of an 11.5 percent working interest in approximately 215 existing producing wells and approximately 262 future development locations in the Sanish field in Mountrail County, ND.

The Sanish Field Assets are part of the Greater Williston Basin, where industry activity is focused on development of the prolific Bakken Shale formation. Whiting Petroleum Corp., a publicly traded oil and gas company operates the asset on behalf of the seller and other working interest owners. 

If the agreement is closed, Energy 11 Operating Co. LLC will be a non-operator, with Whiting, the largest producer in this basin, acting as operator. “We anticipate drilling capital expenditure requirements for the Sanish Field Assets to be an estimated $75 million through 2020,” says the firm.

The Bakken Shale and its close geologic cousin, the Three Forks Shale, are found in the Williston Basin, centered in North Dakota. The Bakken Shale is one of the largest oil fields in the U.S., covering an area of approximately 17,500 square miles. While oil has been produced in North Dakota from the Williston Basin since the 1950s, it is only since 2007, through the application of horizontal drilling and hydraulic fracturing technologies that the Bakken has seen an increase in production activities.

The cash purchase price consists of an initial $160 million payable at closing and a contingent payment of up to $95 million. The contingent payment will provide for a sharing between Energy 11 and Kaiser-Whiting LLC to the extent the NYMEX price for WTI is between the current five-year strip oil price and $89 per barrel.