Vaalco Energy Inc., Houston, (NYSE: EGY) plans to acquire a 65% operating working interest in approximately 23,000 net mineral acres of leases covering the Montana Bakken from Magellan Petroleum Corp., Portland, Maine, (Nasdaq: MPET) for $5 million.

The assets target the Bakken and deeper formations in the East Poplar Unit and Northwest Poplar Field in Roosevelt County, Montana. Vaalco has committed to spend approximately $15 million to drill three wells to the Bakken formation and to formations below the Bakken in Poplar Field.

All three wells will be drilled by the end of 2012 and one well will be drilled on or before June 1, 2012. Of these, one well will be drilled horizontally to test the Bakken, one well will be drilled vertically to test the Red River formation, and the third will be targeted at Vaalco’s discretion.

Vaalco chairman and chief executive Robert Gerry says, “We are excited to complete this acquisition of additional Bakken acreage, which we believe will be a powerful source of oil revenues to VAALCO over the next several years. In addition to the potential we see in the Bakken formation, we will also be evaluating deeper objectives in the Three Forks, Nisku and Red River formations.”

Magellan will retain its current ownership for all formations above the Bakken, including the currently producing Charles and Tyler formations and will retain the remaining 35% of the Bakken and deeper rights.