Energy Prospectus

This will give Q4 production a boost. - Dan

DENVER, Sep 20, 2013 (BUSINESS WIRE) -- Whiting Petroleum Corporation announced today the closing of the previously announced $260 million acquisition from a private party of certain producing oil and gas wells and development acreage in the Williston Basin. The purchase price is subject to customary post effective date closing adjustments for revenues and expenses.

The acquired properties consist of approximately 17,282 net (39,310 gross) acres located in Williams and McKenzie counties of North Dakota and Roosevelt and Richland counties of Montana that target the Middle Bakken and Three Forks zones. The properties include 13 operated 1,280-acre Bakken/Three Forks drilling spacing units with an average working interest of 58% and net revenue interest of 48%. 92% of the acreage is held by production.

Net oil and gas production from the properties was estimated to average 2,420 barrels of oil equivalent (BOE) per day in August 2013. Whiting estimates proved reserves to be acquired at 17.1 million BOE (MMBOE) as of the August 1, 2013 effective date of the acquisition, of which 85% is oil and of which 24% is proved developed producing and 76% is proved undeveloped.

I have a lot of respect for Neal Dingmann at SunTrust and he's giving us a little tip inside his note on WLL (on EOX).

*SunTrust Robinson Humphrey (10.3.13)

WLL Now Top Pick.
Whiting is at the forefront of a new completion design that we believe represents a step-change in productivity. Additionally, a full review suggests the company's inventory is deeper than we previously believed. As a result, we are raising our target from $69 to $92 and setting WLL as our Top Pick. See page 2 for more on WLL. Other Bakken companies should also benefit from higher productivity, whether through simple cost control or these new completion techniques. We note Emerald Oil is levered to the western part of the basin where these new concepts are bearing fruit.

New completion techniques drive incremental upside.
Whiting illustrated in a recent presentation that wells completed with new techniques have yielded superior results. These changes look revolutionary, not evolutionary. Specifically, Whiting showed its new cemented liner completion at Pronghorn and Lewis & Clark yielded initial rates ~50% and ~20% higher, respectively, than offsetting wells. This technique also appears to be taking previously marginal areas and making them competitive. At Missouri Breaks, for instance, wells with the new technique have commenced at ~1,200 Boepd, in line with the Bakken average.

Thoughts on Lower Three Forks.
As detailed in our prior note, we believe existing results suggest the Lower Three Forks will be prospective in a relatively limited areal extent. As a result, we have seen less potential for this additional resource to push multiples higher and to lead to meaningful outperformance for the group. However, we find ourselves wavering a bit as the new completion technique could make marginal areas to the north and west more prospective for all zones. (We still have communication concerns on the Nesson Anticline.) For now, our Lower TF location counts are unchanged.

Neal is very good. That is a huge increase in his target price for WLL. My Fair Value Estimate is $87/share.

I think all of our Bakken companies are going to report very strong Q3 results.