Gold Resource Corporation (AMEX: GORO) reports preliminary production results for the third quarter ended September 30, 2014 of approximately 17,200 ounces precious metal gold equivalent (AuEq). Gold Resource Corporation is a gold and silver producer with operations in southern Mexico. The Company has returned over $100 million to shareholders in monthly dividends since declaring production July 1, 2010, and offers shareholders the option to convert their cash dividends into physical gold and silver and take delivery.
The Company's third quarter production of approximately 17,200 ounces precious metal gold equivalent (actual 64:1 silver-to-gold ratio) brings the Company's annual production total to approximately 65,100 ounces AuEq. The Company maintains its 2014 Annual Outlook at 85,000-100,000 ounces AuEq (63:1 silver-to-gold ratio) as budgeted.
"We faced several challenges during the third quarter," stated Gold Resource Corporation CEO and President, Mr. Jason Reid. "Slower than expected mine development resulted in fewer tonnes delivered to the Aguila Mill during the quarter. These production issues revealed some needed managerial changes at the Arista mine, which are currently underway. Production levels were approximately 28% lower in the quarter compared to the first half quarterly average. We are pleased to still be within striking distance of the lower end of our annual production goal given the challenges we encountered and are working hard to return to previous production levels."
Full financial results for the third quarter will be available at the time the Company files its quarterly report on Form 10-Q with the Securities and Exchange Commission.
AbbVie (NYSE: ABBV) and Shire plc (NASDAQ: SHPG) have agreed to terminate their proposed merger following the decision by AbbVie's Board to withdraw support for the proposed transaction. The Company's decision was based upon its assessment of the September 22, 2014 notice issued by the U.S. Department of Treasury, which re-interpreted longstanding tax principles in a uniquely selective manner designed specifically to destroy the financial benefits of these types of transactions. The notice introduced an unacceptable level of risk and uncertainty given the magnitude of the proposed changes and the stated intention of the Department of Treasury to continue to revise tax principles to further impact such transactions.
The Company conducted a thorough review of the September 22, 2014 notice to explore available options to preserve the transaction. This review included the advice of external tax, legal, and financial advisors in both the U.S. and the U.K. The executive management team ultimately concluded that the transaction was no longer in the best interests of stockholders at the agreed upon valuation, and the Board fully supported that conclusion.
Commenting on the transaction termination, AbbVie's Chairman and Chief Executive Officer, Richard A. Gonzalez said:
"AbbVie has built a strong, sustainable strategy with a robust pipeline. Over the past 22 months we have delivered industry leading stockholder returns, our performance and business fundamentals remain strong, and we are on the cusp of a major new product launch with our treatment for HCV. We remain focused on building AbbVie's business through enhanced internal R&D platforms, partnerships, strong commercial execution and licensing and acquisitions."
"The unprecedented unilateral action by the U.S. Department of Treasury may have destroyed the value in this transaction, but it does not resolve a critical issue facing American businesses today. The U.S. tax code is outdated and is putting global U.S.-based companies at a disadvantage to foreign competitors in an area of critical importance, specifically investing in the United States. Comprehensive tax reform is essential to create competitiveness and to stimulate investment in the economy."
Because AbbVie's Board of Directors has withdrawn its recommendation to proceed with the transaction, AbbVie believes it is unlikely that AbbVie stockholders would support the combination, which is a condition to closing the transaction. Shire and AbbVie have agreed to the termination of the Co-operation Agreement and not to proceed with the proposed scheme of arrangement. In addition, AbbVie has confirmed that it does not wish to switch to a contractual takeover offer. As a result, the U.K. Takeover Panel has confirmed that upon Shire announcing:
- its withdrawal of its recommendation;
- that it will not proceed with the scheme of arrangement; and
- it has agreed to the release of AbbVie from its obligation to proceed with the offer, the offer period will end with effect from the publication of Shire's announcement, and the transaction will lapse.
As a result, AbbVie will not be convening an AbbVie stockholder meeting to consider the transaction. Under the U.K. Takeover Code, except with consent of the U.K. Takeover Panel, AbbVie must not, among other things, announce a further offer for Shire within 12 months from the date of this announcement. AbbVie has agreed to pay Shire the break fee of approximately USD$1.635 billion. Shire's right to receive the break fee will be Shire's sole and exclusive remedy for all losses and damages in connection with the transaction.
Resolute Energy (NYSE: REN) updates certain operating data, provides horizontal well results and provides information for its scheduled conference call to discuss results for the quarter ended September 30, 2014.
Our drilling during the third quarter and into the fourth quarter has been focused in Reeves County, Texas (Delaware Basin) and Campbell County, Wyoming (Powder River Basin). We have completed four horizontal wells in Reeves County since May, including two in our Appaloosa area and two in our Mustang area. In the Powder River Basin, our two most recent Turner horizontal wells have been producing since September 3 and 25, respectively. The new wells have contributed significantly to production, and total Company production is on track to be within our annual production guidance as announced on March 10, 2014. Third quarter production was approximately 12,650 barrels of oil equivalent ("Boe") per day with exit rate production for the third quarter of approximately 14,000 Boe per day.
The table below summarizes our horizontal wells completed since the second quarter.
IP rate Boe
Harrison State C20-1401H
Powder River Basin
Castle 13- 41TH
In Reeves County, results have exceeded our expectations from the four horizontal wells that we have put on production since late June. Reflecting these results and incorporating data from other recent wells nearby, our reserve engineering team has increased our expected EUR in this area to 670 thousand barrels of oil equivalent ("MBoe") for a 5,000 foot lateral and to 910 MBoe for a 7,500 foot lateral. The new type curves generate well-level internal rates of return of approximately 30 percent and 40 percent at NYMEX crude oil prices of $80 per barrel and $90 per barrel, respectively, assuming well costs of $9 million for a 5,000 foot lateral and $11 million for a 7,500 foot lateral.
While the horizontal program continues to improve, our mature properties, especially in Aneth Field, are outperforming our plan and provide a consistent base of production and cash flow.
We also continue to advance negotiations on a financing transaction involving a portion of our Aneth Field assets. We cannot say with certainty that such negotiations will result in a transaction, but we are optimistic that an agreement with respect to such a financing transaction will be reached in the near term.
Our horizontal drilling program in Reeves County saw first production on four horizontal wells since the end of the second quarter and the spudding of a fifth well, bringing the total operated horizontal well count in Reeves to six wells either in production, completion or drilling. We are operating one rig in this area, drilling 7,500 foot laterals, and we expect to finish drilling operations on our fifth and sixth wells during the fourth quarter. These two wells will be completed either late in the fourth quarter or early in the first quarter of 2015 depending on equipment availability. In addition to our operated wells, we also have participated in drilling two more non-operated horizontal wells in Reeves County.
Despite adverse weather conditions, we have seen a meaningful production increase during the third quarter coming from our Reeves County properties, clearly demonstrating the potential that we expect to achieve as we continue to unlock the resource base there. During the third quarter, severe storms dumped several inches of rain in the area, causing severe flooding conditions and resulting in inoperable equipment and impassable roads. Fortunately, we did not experience any significant equipment or facility damage as a result of the flooding, but our wells were either shut-in or significantly constrained for about one week as we worked to restore production operations. The impact of the downtime was a temporary reduction in production of approximately 10,000 Boe in aggregate.
The following provides more detail on the Reeves County activity:
Harrison State C20-1401H: In our second quarter earnings press release we reported initial volumes on this well, our second horizontal well in Reeves County, which saw first production on July 1. We can now report peak 30-day production of 973 Boe per day. The well has been managed with a conservative flowback strategy and continues to produce at volumes in excess of 900 Boe per day at 2,000 psi on a 26/64 inch choke. Normalized on flowing pressure, we think the Harrison State has the potential to be one of the best wells in the area.
Renegade 0302BH: In our second quarter press release we also mentioned that our first 7,500 foot lateral, the Renegade 032BH (31-stage completion in the Wolfcamp B), had just begun flowback. We saw first production from this well on August 9, and we can report a peak 24-hour rate of 1,521 Boe per day with 45 percent oil. Because of our conservative flowback approach and the effect of shut-ins due to weather and during the frac operation on the offsetting Steamworks well, we believe that we have not yet seen a 30-day peak production number.
James 02-1401H: After completing the Renegade, we completed the James 02-140H well with a seven-stage frac in a 1,746 foot lateral. First production was on August 31 and we established a peak 24-hour IP of 1,027 Boe per day. Due to the weather related shut-ins we have not established a peak 30-day rate. Nevertheless, over its first 30 days of production this well has exceeded our original type curve and was tracking our new Appaloosa 5,000 foot lateral type curve EUR of 670 MBoe.
Steamworks 0301BH: Our fifth operated horizontal well in Reeves County, the Steamworks 0301BH, was originally planned as a 7,500 foot lateral and was drilled to total depth during the quarter. In preparing the well to run the production casing, we experienced mechanical issues with the wellbore, resulting in a shorter lateral section suitable for completion. Offsetting the Renegade well in the Wolfcamp B, the Steamworks was recently completed with a twelve-stage frac and commenced flowback on October 9, with initial pressures similar to the Renegade well. It is too early to report production volumes.
Great Divide 1402BR: The Great Divide 1402BR well, a planned 7,500 foot lateral Wolfcamp B target, located in our Mustang area, is drilling in the lateral section and is ahead of schedule. We expect to reach total depth on this well prior to the end of October. After this we will move the rig to the Harpoon 1410BH well, a 7,500 foot lateral directly offsetting the Great Divide well. We expect to conduct simultaneous completion operations on these two wells.
Our Midland Basin acreage in Howard and Martin counties also saw drilling activity, including a non-operated vertical Wolfberry well drilled in the third quarter and another vertical Wolfberry well spud at the end of the quarter. We also have committed to participate with a ten percent working interest in a non-operated horizontal Wolfcamp well in Howard County. We expect this well to be drilled during the fourth quarter, and anticipate additional horizontal drilling will take place on this acreage during 2015.
Aneth Field production has increased over prior periods even though there have been no significant capital development projects undertaken this year. Additionally, lease operating expense has been lower than plan, contributing to the asset's ability to provide substantial free cash flow. The strength of this world-class asset results from the cumulative effect over many years of improving operations, maintenance, reservoir engineering and geology.
Second quarter activities were focused on enhancing the reliability of the surface production equipment, working with our power provider to increase available power for future expansions, preparing the nine pattern DC IIC project in the McElmo Creek Unit for CO2 injection and permitting work for future well activities.
Hilight Field – Powder River Basin
During the third quarter, we successfully drilled and completed two horizontal wells in Hilight Field targeting the Turner formation. These wells are located approximately three miles from our successful first Turner well, the Castle 3-21TH, which has cumulative production of 132,000 Boe in eleven months and is still producing at a rate of approximately 265 Boe per day. The Castle 3-21TH attained payout after approximately one year of production.
Grand 7-14TH: In August, we finished drilling the Grand 7-14TH with a 4,566 foot horizontal section in the Turner formation and completed the well with an eighteen-stage frac. The well currently is producing on pump at a rate of approximately 450 Boe per day.
Castle 13-41TH: Also in August, we finished drilling the Castle 13-41TH well from the same platform as the Grand well. The two wells were sequentially completed in the Turner formation. The Castle well has a 4,700 foot horizontal section and was completed with a nineteen-stage frac. The well is producing on pump at a rate of approximately 265 Boe per day. It is too early to discuss EUR and rates of return from the two most recent wells.
We have identified approximately 45 horizontal Turner locations and we expect to continue Turner drilling activities in 2015. Throughout the basin, operators have been actively testing other formations, and our preliminary evaluation of sidewall cores and logs taken from our recently drilled wells indicate opportunities in the Parkman and Sussex formations on our Hilight Field acreage. We believe we may have as many as 32 potential Parkman horizontal locations in addition to our inventory of Turner locations.
Earnings Call Information
Resolute will host an investor call on November 10, 2014, at 4:30 PM ET. To participate in the call please dial (800) 860-2442 from the United States, or (866) 605-3852 from Canada or (412) 858-4600 from outside the U.S. and Canada. The conference call I.D. number is 10054923. Participants should dial in five to ten minutes before the scheduled time and must be on a touchtone telephone to ask questions.
A replay of the call will be available through November 12, 2014, by dialing (877) 870-5176 from the U.S., or (858) 384-5517 from outside the U.S. The conference call I.D. number is 10054923.
Enanta Pharma (NASDAQ: ENTA) announced that it has decided not to exercise its co-development option for ABT-493, Enanta’s next-generation protease inhibitor for hepatitis C virus (HCV) being developed in Enanta’s collaboration with AbbVie (NYSE: ABBV). Per the original collaboration agreement signed in December 2006, Enanta will be eligible for certain regulatory approval milestones as well as royalties on net sales allocable to ABT-493 from worldwide sales of any ABT-493-containing regimens. Enanta also announced that it has reached agreement with AbbVie regarding the net sales allocations for royalty calculations for ABT-450-containing regimens, as well as any regimens containing ABT-493. ABT-450 is the first clinical-stage protease inhibitor candidate developed within the Enanta-AbbVie collaboration, and ABT-493 is the second.
“We believe that the development and commercialization of our HCV protease assets, ABT-450 and ABT-493, are in good hands with the expertise and resources of a global biopharmaceutical company such as AbbVie,” stated Jay R. Luly, Ph.D., President and CEO. “At this time, we have decided it is better to use our financial resources generated by these partnered assets to advance our other internal proprietary candidates for HCV, including our newly reacquired NS5A program, and to pursue the growth of our pipeline beyond HCV with additional candidates in infectious disease and other indications.”
Net Sales Allocations for Protease-Inhibitor-Containing Regimens Used to Calculate Annual RoyaltiesUnder the original agreement with AbbVie, Enanta is entitled to receive payments for regulatory and reimbursement approval milestones, as well as annually tiered royalties per product, ranging from the low double digits up to twenty percent, on AbbVie’s worldwide net sales allocable to the collaboration’s protease inhibitor product. With the amended agreement, the following percentages of worldwide net sales of ABT-450-containing regimens will be the net sales then used to calculate annual royalties payable to Enanta:
Percentage of Annual NetSales Used for EnantaRoyalty Calculation
|ABT-450-containing 3-DAA regimen(ABT-450/r, ombitasvir and dasabuvir)||30%|
|ABT-450-containing 2-DAA regimen(ABT-450/r, ombitasvir)||45%|
For any HCV treatment regimen containing ABT-493, net sales forroyalty purposes will be determined by dividing AbbVie’s worldwidenet sales of the regimen by the number of DAAs in the regimen (e.g.50% of net sales for a 2-DAA regimen and33 1/3% of net sales for a 3-DAA regimen).
In addition, although ABT-493 is not currently being developed for sale in combination with any active ingredient other than a DAA, if it were, then there would be a further adjustment to net sales of the regimen for royalty purposes based on the relative value of any non-DAA in the regimen sold by AbbVie.
Protease Inhibitor Collaboration with AbbVieIn December 2006, Enanta and Abbott announced a worldwide agreement to collaborate on the discovery, development and commercialization of HCV NS3 and NS3/4A protease inhibitors and HCV- protease-inhibitor-containing drug combinations. ABT-450 and ABT-493 are protease inhibitors identified through the collaboration. Under the agreement, AbbVie is responsible for all development and commercialization activities for ABT-450, the collaboration’s lead compound that has been submitted for approval in the United States and the European Union as part of a multi-drug regimen. Enanta received $57 million in connection with signing the collaboration agreement and $95 million in subsequent clinical and regulatory milestone payments, and is eligible to receive up to an additional $155 million in payments for regulatory and reimbursement approval milestones, as well as annually tiered, double-digit royalties per product on AbbVie’s worldwide net sales allocable to the collaboration’s protease inhibitors.
Lam Research (NASDAQ: LRCX) announced it has shipped the 100th Syndion module for deep silicon etch applications, including CMOS image sensors (CIS), interposers, and through-silicon vias (TSVs). Lam's production-proven 2300® Syndion® product family is the etch market leader for manufacturing advanced CIS chips, which are used in mobile, automotive, and medical devices. The systems are also used to create TSVs for stacked memory and other three-dimensional integrated circuits (3D ICs). To enable the transition of 3D ICs from development to high-volume production, Lam's Syndion products provide industry-leading performance in etch uniformity, profile control, and productivity. As a result, Syndion is the development tool of record for TSV etch with the majority of leading IC manufacturers worldwide.
"We are pleased to have achieved this important milestone, which validates the trust our customers have in Syndion's capabilities, not only to address expanding CIS applications, but also to tackle tough TSV integration challenges," said Vahid Vahedi, group vice president, Etch Product Group. "Because of Syndion's broad process flexibility, we are playing a critical role in supporting the industry's transition of 3D ICs to production."
The market for Syndion's applications is growing with the increasing demand for new products that incorporate CIS devices and TSV structures. Widespread integration of CIS chips in mobile electronics -- for example, cameras in cell phones and tablets -- and for automotive and medical applications continues to fuel demand. To achieve smaller form factors and increase bandwidth for memory chips, TSVs are being integrated into manufacturing for stacked memory designs, such as those used in advanced networking systems and servers. To address requirements for faster data transfer rates, smaller package sizes, and reduced power consumption, TSVs are also being used to connect vertically stacked chips to form 3D ICs. One of the key challenges for transitioning 3D ICs to high-volume manufacturing is achieving a lower overall cost of ownership for integration.
The successful adoption of Syndion products at customers worldwide is a result of their robust design -- built on Lam's market-leading 2300® Kiyo® conductor etch family -- and their optimization for deep silicon etch applications. In particular, Syndion's fast gas switching capabilities enable the industry's highest throughput with superior etch depth and critical dimension (CD) uniformity for both large CD/low aspect ratio and small CD/high aspect ratio structures. These technologies provide the high productivity and process control needed to integrate TSVs into production environments.
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