Kodiak Oil and Gas to buy assets in North Dakota for $660 mln

Mon Jun 3, 2013 9:53am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

June 3 (Reuters) - Kodiak Oil & Gas Corp said it would buy oil and gas assets in North Dakota for about $660 million from privately held Liberty Resources to expand in the region.

The company said it was acquiring properties in the Bakken and Three Forks formations and undeveloped leasehold in the Williston Basin of North Dakota.

North Dakota has experienced a surge in output after tapping into the giant Bakken shale formation which straddles the U.S. and Canadian border, turning the region into the second-largest oil producing state in the United States.

The Bakken Formation and Three Forks Formation, which spans parts of Montana, North Dakota and South Dakota together hold an estimated 7.4 billion barrels of undiscovered, technically recoverable oil, a U.S. Geological Survey study said in April.

The deal will add 42,000 net acres of producing and undeveloped properties to Kodiak's assets, bringing its total holdings in North Dakota's Williston Basin to about 196,000 net acres.

The assets acquired through the deal produced about 5,700 barrels of oil equivalent per day in May, Kodiak said.

The deal, which is expected to close in July, would immediately add to the company's financial results on a per-share basis, Chief Executive Lynn Peterson said in a statement.

"We view this transaction as a modest positive, as Kodiak was able to add contiguous acreage to its inventory of core Bakken acreage at a reasonable pricing," analysts at Robert W. Baird & Co wrote in a note.

Shares of the Denver-based company were trading marginally lower at $8.76 in early trade on the New York Stock Exchange.