Triangle Petroleum Corp.

Since reorganizing itself under a new strategic initiative, Triangle Petroleum Corp. has never made any qualms about its long-term goal: acquiring 100,000 net acres of land in the Bakken Shale with two-thirds of those assets being operated by itself and the remainder operated by joint-venture partners. The company stepped into the shale play with 4,000 net acres in North Dakota’s Williams and McKenzie counties. Just two years after announcing its shift of focus to the Bakken Shale, Triangle’s Bakken Shale portfolio sits at 83,400 net acres and operator of 60 percent of its land assets.

“The Bakken Shale will be our new core area of operations in the United States,” Executive Chairman Peter Hill states. “The focus has been on understanding the geology and science of the play and the capacity of applied technology to unlock the significant oil and gas reserve potential. Completion technology and the ability to drill long, carefully directed horizontal wells have changed the oil business forever. It is my personal belief that the Williston Basin Bakken play will ultimately be proven one of the largest oil accumulations in North America.

“Our business strategy is to directly acquire and develop acreage prospective for capturing the Bakken resource base at attractive margins,” he continues. “We will continue to grow and develop the business platform needed to deliver both early production and the turn around of Triangle.”

Since coming to the Bakken Shale, Triangle has added to its original 4,000 acres with a steady stream of acquisitions. It now owns all the assets of Williston Exploration LLC, a privately held Texas-based company, as it announced in October 2010. The assets – approximately 1,730 net undeveloped acres in Williams County, N.D. – are in contiguous blocks in three separate 1,280-acre units and provided Triangle with its first operated drilling locations.

New Targets
Around the same time, Triangle announced its newly developed land staff, brokerage and title team successfully acquired 1,200 acres at less than $1,000 per acre, including approximately 700 net acres in the same township as the Williston Exploration acquisition. It brought Triangle’s Williston Basin net acreage to 13,000 targeting the Bakken Shale and Three Forks formations.

In its most recent acquisition, Triangle acquired 42,000 net acres in the Bakken and Three Forks formations within the Williston Basin called the Station Prospect.

“The Station Prospect acquisition brings us closer to our long-term goal of 100,000 net acres and a two-thirds operated and one-third non-operated leasehold position,” Hill states.

“The Station Prospect is located in a thermally mature area of the basin and provides us with a significant number of net drilling locations in a largely contiguous block,” he continues. “We believe the combination of rapid development of our core non-operated Rough Rider acres, approximately 5,000 net acres of operated units in Williams and McKenzie counties of North Dakota, and the high growth and value accretion of the Station Prospect provides our shareholders with a balanced portfolio of pure-play exposure to the upside of the Williston Basin.”

Station Prospect, located in Montana, brought Triangle’s land holdings in the state to 50,000 acres. Its Montana assets cover Sheridan and Roosevelt counties. Their positions are largely contiguous and lie on the northwestern flank of the Williston Basin, adjacent to the Elm Coulee Field. Driven by geologic modeling and control from vintage producing wells, the company was an early mover in the region, which allowed it to secure attractive leasehold terms, the company says.

“While this region of the basin is primarily undeveloped, permitting and drilling activity by the industry continues to converge on Triangle’s acreage position,” the company says. “Benefiting from protracted leasehold terms, the company does not plan on deploying capital to this area over the near term, preferring other operators de-risk the area before committing resources.”

With 50,000 acres in Montana at Station Prospect and 33,4000 acres in North Dakota and eastern Montana in the core area, Triangle Petroleum is well on its way to reaching its goal of acquiring 100,000 acres in the Bakken Shale. As it works to acquire the remaining 16,600 needed to hit its target, Triangle and its partners are actively involved in drilling and production programs. In the core area in McKenzie County, Triangle has five producing wells. The wells averaged 8,330 barrels of oil per day in August.

In fiscal year 2013, with a budget of $173 million, Triangle’s drilling and production operations will continue to move forward. It has 63 drilling permit applications either approved or submitted and has budgeted $98 million for its operated-drilling program and $15 million for its non-operated-drilling programs. The heavy investment in its operated-drilling programs is aligned with the company’s overall goal as told to Penn Energy in 2010.

“We have recruited top talent with experience in the Williston Basin and we have aligned our operations and business interests,” President and CEO Jonathan Samuels told Penn Energy.

“We at Triangle also believe we have a role to play in how these tremendous reserves are developed to the benefit of all stakeholders,” he continues. “We have come a long way since we entered the basin in early 2010 with a market cap of $5 million.” EMI