Crude and natural gas producer, Hess Corporation (HES) entered into an agreement to acquire 167,000 net acres from TRZ Energy, LLC for $1,050 million in cash in the Bakken oil shale play in North Dakota. The acquisition will increase Hess' acreage position in the Bakken oil play to over 750,000 net acres. The deal is expected to close by December 28, 2010.

The Bakken Shale is the largest continuous oil accumulation and is often eyed by companies interested in expanding their acreages in the area. Hess' recent deal is not an exception in this regard. In July 2010, Hess added about 85,000 acres on the oil-rich Bakken shale formation through its acquisition of an independent energy company American Oil & Gas Inc. (AEZ) in an all-stock transaction valued at about $445 million. The deal is expected to be wrapped up in the fourth quarter of 2010.

Last week, Williams Cos. (WMB) acquired a major acreage position in North Dakota's Bakken oil play and agreed to buy 85,800 net acres from private owners. Williams will pay $925 million for the Williston Basin properties estimated to hold net reserve potential of approximately 185 million Boe (MMBoe). Other assets included in the deal were 24 existing wells with net production of 3,300 barrels of oil per day.

We continue to see an upstream momentum on the back of Hess' large line-up of exploration and production (E&P) projects. The company's improving fundamentals, commodity price leverage and exposure to areas with high resource potential have improved its prospects. A ramp up in activities at the Bakken, Eagle Ford, and Marcellus, in the U.S. and the Paris Basin in France, accompanied by a rich portfolio of offshore drilling opportunities in the Gulf of Mexico, Brazil, West Africa, and Egypt, will strengthen the company's future production growth and drive its earnings, cash flow and valuation.