Will give Statoil access to Bakken and Three Forks formations which are among the largest oil accumulations in the U.S.
Norway's Statoil announced on Oct. 17 that it would buy Brigham Exploration for $4.7 billion, allowing it to significantly expand its non-conventional oil and gas extraction activities in the United States.
The purchase will give the Norwegian energy giant access to a 580-square-mile area in the Williston basin containing the Bakken and Three Forks shale oil formations in the states of North Dakota and Montana.
Statoil said it would pay $4.4 billion in cash and another 300 million in acquired debt for the American company, offering a 36% premium over the average trading price for Brigham stock for the last 30 days.
"The Bakken and Three Forks formations are among the largest oil accumulations in the United States," Statoil said, pointing out that "various sources have estimated the technically recoverable reserves to be in the range of five to 24 billion boe (barrels of oil equivalent), over a 38,000 square kilometer area."
Based in Austin, Texas, Brigham currently produces some 21,000 barrels of oil equivalent per day (boe/d), Statoil said, adding that it hoped production would rise to between 60,000 and 100,000 boe/d over the next five years.
Its reserves have been estimated at between 300 and 500 million boe.
Statoil is already deeply involved in so-called "unconventional" oil and gas extraction in the United States, where it owns shares in both the Marcellus shale formation in the east and Eagle Ford field in Texas.
Statoil chief executive Helge Lund told said his company expects unconventional energy "to represent an increasingly important part of future energy supplies, especially in the United States."
"Entering the Bakken and Three Forks tight oil plays and taking on operatorship represents a new significant step for Statoil. We are positioning ourselves as a leading player in the fast growing U.S. onshore oil and gas industry, in line with the strategic direction we have set out," he said.
Shale oil, like shale gas, holes up in a dense sedimentary rock which is fractured by large volumes of water and chemicals that are piped in horizontally under high pressure. The hydraulic fracturing process is controversial and widely criticized by environmentalists due to the danger it can pose in terms of groundwater pollution.
"Our activities should respect strict safety requirements," Lund said, stressing that "it is important for us to minimize our environmental footprint."
Statoil is currently facing legal action in Canada over its use of water in relation to exploitation in Alberta of oil sands, which is also a controversial process considered to be heavily polluting.
Copyright Agence France-Presse, 2011