More action cookin’ in southeastern Saskatchewan’s Bakken light oil play

The sizzling Bakken light oil play in southeastern Saskatchewan — a spillover from the Williston basin in North Dakota and Montana — got another strong endorsement from Petrobank Energy and Resources.

The acquisition-minded Canadian junior E&P company is betting most of a C$334 million takeover offer on Bakken, rated as Western Canada’s hottest light oil prospect in more than 50 years, with 5 billion barrels of original oil in place, of which about 16 percent is thought to be recoverable at a drilling density of eight wells per section.

In a cash, shares and debt offer for Peerless Energy, Petrobank makes no secret of its hopes for Bakken, which is capable of yielding sweet, light 41 degree API gravity oil and liquids-rich solution gas.

So long as the transaction gets court, regulatory and shareholder approval, anticipated over the next two months, Petrobank will boost its production from Bakken to 7,900 barrels of oil per day, or about 55 percent of its total output from Western Canada and Colombia.

Petrobank is also operator of the Whitesands oil sands project, which is testing a new extraction technology to exploit reserves of 3.6 billion barrels, which it hopes eventually to turn into a 100,000 bpd facility.

Viewing Bakken as its “primary conventional Canadian focus area in 2008 and for years to come,” Petrobank said. Peerless’ facilities and infrastructure will also allow it to recover natural gas and liquids production from the area.

With the Peerless assets, Petrobank will have a drilling inventory at Bakken of 600 (565 net) well locations based on a well density of four wells per section. It plans to drill more than 110 Bakken wells in 2008, operating seven rigs.

—Gary Park