mackie research updateupdate
Event: Site visit to Bridge’s Hamilton and Willow fields in Boise Idaho.
High Rate Test at Willow: Bridge hosted an investor trip to its operations located in the Western Idaho Basin. The trip was highlighted with a demonstration flare test of the M.L. Investments #1-10 well which previously tested at an average rate of 4.5 mmcf/d and 54 bbl/d of liquids. While on site the well flowed at 5.8 mmcf/d with approximately 100 bbl/d of condensate through a 24/64 inch choke and at a flowing pressure of 1,650 psi versus the shut in pressure of 1,800 psi (Figure 1). The limited pressure drawdown indicates that the well is capable of a much higher rate. Bridge also showed us a portion of the 28 mile 2D seismic data that was recently shot over the Willow field. Based upon the new data Bridge has selected a minimum of 3 drill ready locations that are up to 150 feet up structure to the M.L. Investments well. All three wells have multiple target zones. The first well of the Willow fall drilling program is expected to commence drilling mid-October immediately after completion of the May #1-13 well which is currently drilling.
Important Step-out Exploration Well Drilling at Hamilton: The May #1-13 well is located approximately 6 miles away from the closes well in the Hamilton field. While at the drill site the well was setting surface casing at a depth of approximately 600 feet (Figure 2). Total depth is anticipated to be approximately 6,800 feet and the well has multiple objectives. Bridge hopes to prove that the sands in the May# 1-13 well are connected to the sands in the other Hamilton wells. If successful , the Hamilton field could have a substantial areal extent. Bridge has contracted a testing unit which is expected to arrive on the Hamilton field within the next 2 weeks. The unit will complete longer term testing of the newly drilled Hamilton wells.
Although it’s early in the exploration stage, the Hamilton and Willow fields holds substantial resource potential that is not currently reflected in the stock price. We reaffirm our BUY recommendation and our
.95 target price.
Catalysts:
1. Results of the May #1-13 well (October 2010)
2. Results of the first exploration well at Willow (Late October)
3. Sale of North Sea natural gas subsidiary (November 2010)
4. Farm-out of Steamboat North Sea oil prospect (December 2010)