X-Change Corporation ( OTCQB : XCHC ) announced through its subsidiary, Cutbank Operating Co. Inc. , an oil and gas operating and drilling company, executed a letter of intent with a private oil and gas fund for participation in working interest for an initial 5,000 acre drilling program in Daniels County, Montana.
The fund will provide the first tranche of funding for an initial eight-well drilling program in Daniels County. The funding commitment is for $65 million. Upon success of the production of the first eight wells, the fund will provide an additional $175 million in working interest to capitalize the remaining leasehold positions in Daniels County and Roosevelt County. The company is expected to begin its drilling program in early November. The funding is expected to close within 30 days.
The Bakken Shale in the NE Montana area is from the Devonian Mississippian age. The widespread Upper Devonian-Lower Mississippian Bakken formation consists of an upper and a lower shale member with a mixed siliciclastic carbonate middle member that is usually referred to as dolomitic sand (or a sandy dolomite). Both the upper and lower shales are organic-rich marine shale of relatively consistent lithology. These shales are both the petroleum source rocks (organic rich) and seal for the reservoir.
The Bakken has reserve estimates up to 6-24 billion barrels of recoverable oil. More than 6000 wells are active in the Bakken shale, and wells continue to be drilled in North Dakota and NE Montana. The shift is moving towards aggressive drilling in the NE and central Montana Bakken Shale counties.