The Heath formation in Montana is starting to attract more attention and capital from the exploration and production industry, as it scours North America looking for the next best oil and liquid play to develop.

TUTORIAL: Economic Indicators To Know

Heath Formation
The Heath formation is located in Montana across various parts of the middle of the state, including Garfield, Musselshell and Petroleum Counties. The Heath is a late Mississippian formation and has been the source rock for many of the existing oil fields in central Montana. Some operators refer to the play as the Heath - Tyler formation, as the Tyler Sandstone lies above the Heath.

The Players
Cabot Oil and Gas (NYSE:COG) finished drilling a Heath well earlier in 2011, and plans to begin completion operations on the well in May 2011. The company has more than 100,000 net acres with exposure to the Heath.

Cabot Oil and Gas is not disclosing any other plans for the area until it can evaluate the results of this well. "We have been asked about our future plans in the Heath and right now, we're just currently focused on the completion of this particular well," said Dan Dinges, the CEO of Cabot Oil and Gas.

MDU Resources (NYSE:MDU) has 80,000 net acres prospective for the Heath formation and is looking to drill an exploratory well in the second half of 2011.


EOG Resources (NYSE:EOG) may also have exposure to the Heath formation. The company drilled the Flatwillow 1-31H well in 2008 to test the Bakken formation in Montana. The well was considered non productive by the company but during the drilling EOG Resources obtained core samples from the Heath formation that according to one geologic report contained "thick, gassy, oil saturated, mature source/reservoir rock."

Other companies have exposure to the Heath formation. Voyager Oil and Gas (AMEX:VOG) has 33,500 net acres under lease in various counties in Montana. The company plans to evaluate the results of other operators working on the play before committing substantial capital to the Heath play.

Endeavour International (NYSE:END) has 75,000 net acres and is involved in a joint venture with two other private oil and gas companies in the area. The joint venture plans up to four vertical pilot wells in 2011 on its acreage. UnionTown Energy (OTCBB:UTOG) has 7,000 acres in Musselshell County, and estimates its recoverable resources from the Heath and other formations at 10.4 million barrels of oil equivalent.

The exploration and production industry is working on the Heath formation in Montana, and hopes this play will yield large amounts of recoverable resources at a reasonable cost.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Economics

    Investing Opportunities as Central Banks Diverge

    After the Paris attacks investors are focusing on central bank policy and its potential for divergence: tightened by the Fed while the ECB pursues easing.
  2. Stock Analysis

    The Biggest Risks of Investing in Pfizer Stock

    Learn the biggest potential risks that may affect the price of Pfizer's stock, complete with a fundamental analysis and review of other external factors.
  3. Stock Analysis

    Allstate: How Being Boring Earns it Billions (ALL)

    A summary of what Allstate Insurance sells and whom it sells it to including recent mergers and acquisitions that have helped boost its bottom line.
  4. Chart Advisor

    Copper Continues Its Descent

    Copper prices have been under pressure lately and based on these charts it doesn't seem that it will reverse any time soon.
  5. Options & Futures

    Cyclical Versus Non-Cyclical Stocks

    Investing during an economic downturn simply means changing your focus. Discover the benefits of defensive stocks.
  6. Markets

    PEG Ratio Nails Down Value Stocks

    Learn how this simple calculation can help you determine a stock's earnings potential.
  7. Stock Analysis

    What Exactly Does Warren Buffett Own?

    Learn about large changes to Berkshire Hathaway's portfolio. See why Warren Buffett has invested in a commodity company even though he does not usually do so.
  8. Investing Basics

    How to Deduct Your Stock Losses

    Held onto a stock for too long? Selling at a loss is never ideal, but it is possible to minimize the damage. Here's how.
  9. Investing

    What’s the Difference Between Duration & Maturity?

    We look at the meaning of two terms that often get confused, duration and maturity, to set the record straight.
  10. Economics

    Is Wall Street Living in Denial?

    Will remaining calm and staying long present significant risks to your investment health?
  1. Which mutual funds made money in 2008?

    Out of the 2,800 mutual funds that Morningstar, Inc., the leading provider of independent investment research in North America, ... Read Full Answer >>
  2. Do hedge funds invest in commodities?

    There are several hedge funds that invest in commodities. Many hedge funds have broad macroeconomic strategies and invest ... Read Full Answer >>
  3. What does low working capital say about a company's financial prospects?

    When a company has low working capital, it can mean one of two things. In most cases, low working capital means the business ... Read Full Answer >>
  4. Do nonprofit organizations have working capital?

    Nonprofit organizations continuously face debate over how much money they bring in that is kept in reserve. These financial ... Read Full Answer >>
  5. Can a company's working capital turnover ratio be negative?

    A company's working capital turnover ratio can be negative when a company's current liabilities exceed its current assets. ... Read Full Answer >>
  6. Does working capital measure liquidity?

    Working capital is a commonly used metric, not only for a company’s liquidity but also for its operational efficiency and ... Read Full Answer >>

You May Also Like

Trading Center