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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: Ed Ajootian who wrote (130093)	8/25/2010 5:44:06 PM
From: Ed Ajootian	Read Replies (1) of 206155

Resolute Energy (REN) -- Great to see them getting into another Bakken play, and this time with an experienced, first rate operator. Not sure why Marathon wanted the farmout but this was likely a situation where they just didn't have room in their budget to drill out these acres, so rather than just give them up they offerred up the farmout. I believe it costs about $6-7 M to drill & complete a Bakken well these days, so for say $14 M, Resolute gets a ~ 60% W.I. in 2 Bakken wells, plus 8K Bakken acres (net). This is not too shabby given that Bakken acreage is easily worth $2K an acre these days. Partnering with a huge company such as Marathon has the added advantage of maximizing the shot at getting at the front of the frac-waiting que. This is becoming a larger and larger issue up there and getting at the front of the line will be especially important with the oncoming winter (since it often becomes too cold to do fracs economically up there in Jan/Feb).

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