Over the past year and a half, the Williston Basin’s Bakken acreage has been the focus of more than 100 publicly announced transactions. From July 2011 through December 2012, Oil & Gas 360® compiled and analyzed Bakken transactions on average deal sizes, acreage values and production values.
A few historic bullet points from past Bakken deals:
- Since July 2011, each month the average deal flow across the basin averaged $789MM, with an average deal size of $234MM. The largest of transactions during this period was the Statoil (ticker: STO) acquisition of Brigham Exploration for $4.7B, averaged at $8,000 per acre in October 2011.
- Since July 2011, OAG360 observed an average acreage valuation of $2,868 per acre in the Bakken.
Has the price-paid-per acre crested? That depends on where acreage is being picked up. Though we note a steady decline in total dollars spent each month along with a decreasing acreage valuation in the deals completed since September 2012, many of these recent deals are focused outside of the Bakken “core”.
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A few current bullet points on the Bakken:
- Between November 2012 and the beginning of January 2013, transacted acreage values averaged $713 per acre. We note that the two deals that make up this average were done in Divide and Daniels Counties. Not every deal completed over this time period allowed us to calculate a value per acre due to limited disclosure, however, we note that a total of nine deals were completed at an average value of $92.9MM focused on Daniels, Divide, Stark and Richland Counties.
- Over the 18-month measurement period, the largest transactions occurred in Williams County, averaging $655.3MM per transaction and an average value of $8,288 per acre.
- Deals in McKenzie County over the past 18 months received the next highest acreage value at $3,301 per acre.
- The most active county over the past 18 months was Divide County with 12 transactions averaging $116.0MM in value and $1,769 per acre.
- Since July 2012, companies have seen a wide range of values for flowing BOEPD: from $28,070 per BOEPD to as high as $159,365 per BOEPD, with an average of just under $80,000 per BOEPD.
These large variations in per acre and per flowing production valuations are easily explained and are all too often replayed in other basins around the world. The core acreage is bought and proved up first and late entrants into the paly will have to pay a premium to gain access to these less risky positions. As companies look to expand a play by looking to acquire acreage on the fringe, companies take on the additional exploration risk but the value of acreage declines. We want to point out that the majority of recent deals have been on the fringe of the play and remind readers that deals targeting Williams and McKenzie Counties, considered by some to be the heart of the play, will demand premium valuation.
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