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FTC OKs Statoil's Bid for Brigham Exploration

The Federal Trade Commission (FTC) has approved the proposal of Norway's Statoil ASA, which already has significant holdings in the Marcellus and Eagle Ford shales, to acquire Austin, TX-based independent Brigham Exploration Co., which would give it access to the Williston Basin's Bakken and Three Forks oily formations.

The transaction cleared the Hart-Scott-Rodino waiting period on Monday, with the FTC imposing no restrictions. The transaction is valued at $4.4 billion (US$36.50/share) and is expected to close either later this year or early in 2012, Brigham said.

The transaction would give Statoil access to more than 375,000 net acres in the Williston Basin, which holds potential for oil and gas production from the Bakken and Three Forks formations. Brigham also holds interests in 40,000 net acres in other onshore plays.

"The U.S. unconventional plays hold a substantial resource base and represent an increasingly important part of future energy supplies," Statoil CEO Helge Lund said last month when the deal was announced (see Shale Daily, Oct. 18). "Statoil has step by step developed industrial capabilities through early entrance into Marcellus and Eagle Ford. Entering the Bakken and Three Forks tight oil plays and taking on operatorship represents a new significant step for Statoil.

And Statoil will be good for Brigham Exploration, said Bud Brigham, the company's president. "A bigger enterprise with a larger balance sheet will be better positioned to take advantage of our large and growing inventory of Williston Basin drilling locations and the associated assets."

Brigham has drilled 88 consecutive producing North Dakota wells, with an average early 24-hour peak production rate of 2,800 boe/d. The company currently operates 12 rigs in the area and planned to drill about 140 wells per year.

In addition to the production assets, the Brigham transaction also provides Statoil with about 430 miles of oil, natural gas and water transportation systems in the Williston Basin, which not only secures wastewater offtake but reduces the environmental footprint in production operations.

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