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Jan 29, 2013 1:31 AM by Jay Kohn

Verdict still out on Montana Bakken oil play

BILLINGS - There appears to be two schools of thought when it comes to foreseeing Montana's Bakken potential.

The website seekingalpha.com reports that while the Montana Bakken play is evolving and still developing, much of the early indicators so far have been disappointing.

The article looks at some of the top companies holding oil and gas leases in Montana.

Emerald Oil, with 65 percent of its total acreage in Montana, reports disappointing production from its first well.

Two other companies, Triangle Petroleum and Abraxas Petroleum are in a "wait and see" mode.

The article says Triangle has no immediate plans for further exploration, while Abraxas says it is not planning additional exploration this year.

In central Montana. Crescent Point Energy recently suspended operations in Pondera County due to poor drilling results in two locations.

The author of that article writes "the results from Montana - thus far - are far from a superior long-term production performance, but says "we'll know more once more 2013 drilling results are made public."

A much different perspective comes from a recent article in the Oil & Gas investments bulletin.

Author Keith Schaefer writes that Montana's Bakken potential is rising due to new data that shows geology may be less of an obstacle.

Specifically he points to wells that have tapped into the Upper Bakken in Montana - that show great promise.

In North Dakota, the big gushing Bakken wells came out of the middle Bakken layer - the thickest portion of the Bakken.

But in Montana, companies are discovering that middle layer is thinner so they're tapping into the Upper Bakken with promising results.

While the early wells did not have the initial flows like in North Dakota, the Montana Upper Bakken wells have declined slower and have better oil to gas ratios, causing geologists to rethink Montana's potential.

Colorado School of Mines professor Steve Sonnenberg calls the results from the Upper Bakken... "great news for a great play."

Geologist Jim Halverson, with the Montana Board of Oil and Gas, says "there's lots of stuff going on right now, we've got a fair amount of development that's targeting the upper shale."

One thing that everyone can agree on, is that the price of oil is critical for the Montana Bakken play to take off.

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