Comprised of 90% oil, and averaging 550 boe/d gross (384 boe/d net) over the first 30 days, Mountainview Energy’s [TSX.V: MVW] latest Three Forks well can be safely deemed a success. The Charlotte Well, as it is called, is the sixth consecutive successful well for the company on its 12 Gage Property in North Dakota. Marked as the company’s first 32-stage well (as opposed to its previous 26-stagers) for now has increased the company’s total production by 38%.
Coming in at 598 boe/d gross (417 boe/d net) over the first 7 days, the Charlotte Well held in at the company’s highest producing rate to date. As the third and final portion of the company’s three-well drilling program on its 12 Gage property, Charlotte follows on the heels of the second well of the program (the Olson-2 Well), which produced an average of 483 boe/d gross (271 boe/d net) over the first 18 days of it operation. Overall the three-well program added approximately Mountainview approximately 1051 boe/d in net production.
According to President and CEO, Patrick Montalban, the three-well program was not only a production success but marked a vast improvement in well economics.
"When compared to the previous three-well program, we achieved a 25% reduction in drilling and completion costs and increased production levels by 30% to 40%,” says Montalban. “Work continues to reduce monthly operating expenses by cutting workover and water disposal costs leading to increased proved producing reserves and thus value to the shareholder."
The Charlotte well represents the first 32-stage plug and perforation program of the company’s portfolio. All five of the company’s previous wells were done with a 26-stage plug and perforation program, which possibly explains the higher production from Charlotte when compared to the rest.
“Our original wells were all 26-stage, but now we’ve tweaked it up to 32 stages. Our lead engineer is currently determining whether we do a minimum of 32 up to 36 stages from now on. We believe it’s made a big difference on our production rate so far.”
Going forward the company has another two wells on the horizon in the near future, backed by a mezzanine line of credit for $75 million. As they approach the 8-9 well mark (currently 6) and begin to produce proved reserves the company hopes to have a senior line of credit as the stock gains some traction. There is likely another form of equity financing in the form of a private placement available to Mountainview, as there are currently just under 88 million shares outstanding.
“We’ve really worked hard not to dilute the stock,” says Montalban.
“We believe we’re under valued at the $0.50 level. We should be able to continue to go on the path that we are on, and grow our stock up over $1. It’s after that when we see a financing likely that won’t dilute the existing shareholders.”
In total the company has drilled six wells in 2013 on its 12 Gage Project that went on to production within Divive County, ND. With the latest addition of Charlotte, the company’s current production rate coming from the 12 Gage Project is 1,652 boe/d gross (1,243 boe/d net). In total, Mountainview now has approximately 1,802 boe/d gross (1,393 boe/d net) under its corporate belt.
When last assessed compared to its peers, Mountainview was ranked as the 38th largest producer in the Bakken’s Williston Basin. However, that calculation was made when the company was only producing 480 boe/d, where they are now approximately three times that marker now. Look for Mountainview to begin to land on radars as they begin a more assertive market awareness campaign to compliment their upcoming drilling campaign in 2014.
G. Joel Chury
Disclaimer: The author of this article owns shares in the company mentioned at the time of publication. The company did not pay for the publication of this article, nor is a sponsor of the website. This is an independent article covering the latest news from the company.