Mountainview Energy Ltd. completed two wells and more than doubled its average production during the first quarter of 2014 as it continues to de-risk acreage and identify drilling locations in its 12 Gage Project targeting the Bakken/Three Forks in North Dakota.
During 1Q2014, the company, which is based in Cut Bank, MT, said it placed into production two wells targeting the Three Forks formation from its Reistad pad. Initial gross production rates for the two wells -- Reistad Nos. 23-14-1H and 26-35S-1H -- were 291 boe/d and 401 boe/d, respectively, with 90% weighted toward oil.
Mountainview holds varying degrees of working interest (WI) in eight wells that comprise the 12 Gage Project, located in Divide County, ND, and targeting the Three Forks with Middle Bakken potential (see Shale Daily, April 14). The company holds a 92.54% WI in the No. 23 well at the Reistad pad, and a 99.2% WI in the No. 26 well. It also holds 13,800 net acres and controls 21 spacing units.
"[We are] very encouraged, having de-risked the southern extent of [our] 12 Gage Project," Mountainview said recently. According to the company, the No. 26 well "is the southernmost Three Forks lateral drilled and initial production [IP] rates met [our] expectations for wells in the 12 Gage Project."
On Friday, the company added that with the de-risking of its drilling inventory in the 12 Gage Project, "[we have] identified 72 infill Three Forks/Torquay locations. Adding Bakken potential, management believes that there are an additional 80 drilling locations, all on the 12 Gage acreage.
"With 152 potential drilling locations on the 12 Gage acreage, [we are] strongly positioned to organically grow production and reserves while being able to review acquisition opportunities to further diversify and enhance [our] commodity and play type risk."
Mountainview reported average production of 898 boe/d in 1Q2014, a nearly 230% increase over the preceding first quarter (391 boe/d), but a 24% decrease from 4Q2013 (1,183 boe/d). The company exited 1Q2014 with 1,284 boe/d of production, with 87% weighted toward oil, compared to 510 boe/d (79% oil) during the prior period quarter.
The company spent $7.91 million on capital expenditures (capex) during the first quarter. It plans to drill wells with a higher WI through the remainder of 2014.
"Operationally, [we are continuing] to improve on [our] completion technique and downhole assembly, which is expected to increase IP rates and recoverable reserves while lowering operating expenses," Mountainview said Friday. The company later added that it has selectively increased "WI in its assets whenever appropriate as it has become more experienced operationally. This experience has resulted in decreased capital costs on a per well basis from $8.3 million per well to $6.3 million per well."
In April, Mountainview reported significant growth in its reserves at the end of 2013. The company's total proved and probable reserves had increased to 11.46 million boe, while total proved (TP) reserves had grown to 6.78 million boe; both were increases of nearly 15-fold.