Western Standard Energy Corp., (OTCBB: WSEG) is an independent oil and gas exploration company with properties scattered across Montana and North Dakota. According to the U.S. Geological Survey, the two states have an estimated 3.0 to 4.3 billion barrels of untapped, recoverable oil in the Bakken Formation.
Western Standard today announced it intends to engage in a drilling partnership with Oil for America LLC (OFA) to fund operations for one Lodgepole well and a second Lodgepole-Bakken well, both in North Dakota.
The company also announced it will form a new, wholly-owned subsidiary, receiving an overriding 3 percent royalty for the lease assignments. As part of the partnership, Western Standard will invest half of the “partnership” units for $3.2 million, alongside third-party interests, for an aggregate investment of $6.4 million.
According to OFA, the Lodgepole Reef play was established in 1993 when ConocoPhillips experienced an initial production rate of around 400 barrels of oil per day. For Western Standard, drilling operations of the Lodgepole target are expected to cost $1.6 million. Per the partnership, operations for the Bakken will incur an additional $3.2 million, for an aggregate of $4.8 million for one Lodegepole-Bakken well.
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