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Natural gas producer Williams Companies Inc. said Monday it plans to spend $925 million in cash to acquire oil fields on the Fort Berthold Indian Reservation in North Dakota, in a move to acquire a major position in the state's Bakken Shale area.
The deal will diversify the company's exploration and production interests into light, sweet crude oil production. Williams' entry into the Bakken Shale play follows its move into Pennsylvania's Marcellus Shale, where the company has accumulated about 100,000 net acres over the past year and a half.
By 2013, about 25 percent of the company's exploration and production revenue streams are expected to be generated by oil production, up from 7 percent in 2010.
The latest acquisition includes 85,800 acres held by private owners that contain an estimated reserve of 185 million barrels of oil and gas. The assets also include 24 existing wells that produce 3,300 barrels per day. The deal is expected to close by the end of the year.
Williams, based in Tulsa, Okla., said it expects to invest another $60 million this year and between $200 million and $300 million on drilling and development. The company expects to double its current drilling activity to six rigs by 2012.
. Shares rose 12 cents to $23.17 in morning trading.