GMX Resources (GMXR) Updates on Sales, Ops; Receives $69M in Cotton Valley Sale
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Price: $2.19 --0%
Financial Fact:
Income (loss) from operations: -45.98M
Today's EPS Names:
SVBT, ZEO, OTLK, More
Financial Fact:
Income (loss) from operations: -45.98M
Today's EPS Names:
SVBT, ZEO, OTLK, More
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GMX Resources (NYSE: GMXR) provides a Company update.
East Texas Asset Sale
Today the Company announces that it has received cash proceeds from the previously announced $69 million sale of a portion of Cotton Valley Sands and shallower formation properties in East Texas and Louisiana to a private third party. The liens were released from the Trustee and the Closing documents were signed on October 23, 2012. The effective date of the sale is September 1, 2012.
In East Texas the Company is retaining its entire Haynesville / Bossier natural gas resource base: approximately 40,000 gross (30,000 net) mineral acres containing 38 producing wells and 200 BCF of proved reserves, as well as significant potential reserves. In addition, the Company is retaining Cotton Valley Sands and shallow rights across approximately 13,130 net acres that include 28 undeveloped horizontal locations within its East Texas core position.
The Company will provide transitional services to the buyer to minimize any impact of the sale, including physical well operation, land, accounting, operations and marketing services, for a minimum period of three months.
The company is currently developing its oil resource acreage in the Williston Basin, approximately 36,000 acres, with 8 oil producers in the Bakken & Three Forks, plus 222 operated locations and 260 remaining locations many potentially operated.
Operations Update
The Akovenko 24-34-2H, in which the Company has a 92% working interest, is the first Company-drilled well with oil-based mud. The well is located in Sections 27 & 34, Township 146N, Range 99W in McKenzie County North Dakota. The well reached total depth in less than 30 days and drilling costs were $4 million, in line with our estimates. The plug and perf completion is targeting the Middle Bakken, and we expect oil production to be in early November. This well will be the first plug and perf completion in McKenzie County for GMXR in the Middle Bakken and in a lateral drilled with oil-based mud. Fracture stimulation of the 40-stage well began this week.
The Lange 44-31-2H, in which the Company has a 89% working interest, is located in Sections 30 & 31, Township 147N, Range 99W in McKenzie County North Dakota. We expect the well to take approximately 30 days to reach total depth which will occur in early November. The well will be our second well drilled with oil-based mud and will be completed with a plug and perf fracture stimulation.
Management Comment
Michael J. Rohleder, the Company's President, said, "Now that the East Texas asset sale has closed and provides funding into 2013, we can focus on remaining near-term catalysts for our shareholders, which include, higher daily oil production through improved completions, lower costs per well and more wells drilled per rig per year. We expect to complete our 9th and 10th operated wells by year end, boosting our crude oil production in the fourth quarter. The Akovenko 24-34-2H should be contributing production in November and the Lange 44-31-2H will follow in December. We have completed ten separate financial transactions over the last seven quarters that have resulted in significant increases in available liquidity and we expect to resolve the $27 million of remaining 2013 Convertible Senior Notes due in February 2013 on or before the maturity date."
East Texas Asset Sale
Today the Company announces that it has received cash proceeds from the previously announced $69 million sale of a portion of Cotton Valley Sands and shallower formation properties in East Texas and Louisiana to a private third party. The liens were released from the Trustee and the Closing documents were signed on October 23, 2012. The effective date of the sale is September 1, 2012.
In East Texas the Company is retaining its entire Haynesville / Bossier natural gas resource base: approximately 40,000 gross (30,000 net) mineral acres containing 38 producing wells and 200 BCF of proved reserves, as well as significant potential reserves. In addition, the Company is retaining Cotton Valley Sands and shallow rights across approximately 13,130 net acres that include 28 undeveloped horizontal locations within its East Texas core position.
The Company will provide transitional services to the buyer to minimize any impact of the sale, including physical well operation, land, accounting, operations and marketing services, for a minimum period of three months.
The company is currently developing its oil resource acreage in the Williston Basin, approximately 36,000 acres, with 8 oil producers in the Bakken & Three Forks, plus 222 operated locations and 260 remaining locations many potentially operated.
Operations Update
The Akovenko 24-34-2H, in which the Company has a 92% working interest, is the first Company-drilled well with oil-based mud. The well is located in Sections 27 & 34, Township 146N, Range 99W in McKenzie County North Dakota. The well reached total depth in less than 30 days and drilling costs were $4 million, in line with our estimates. The plug and perf completion is targeting the Middle Bakken, and we expect oil production to be in early November. This well will be the first plug and perf completion in McKenzie County for GMXR in the Middle Bakken and in a lateral drilled with oil-based mud. Fracture stimulation of the 40-stage well began this week.
The Lange 44-31-2H, in which the Company has a 89% working interest, is located in Sections 30 & 31, Township 147N, Range 99W in McKenzie County North Dakota. We expect the well to take approximately 30 days to reach total depth which will occur in early November. The well will be our second well drilled with oil-based mud and will be completed with a plug and perf fracture stimulation.
Management Comment
Michael J. Rohleder, the Company's President, said, "Now that the East Texas asset sale has closed and provides funding into 2013, we can focus on remaining near-term catalysts for our shareholders, which include, higher daily oil production through improved completions, lower costs per well and more wells drilled per rig per year. We expect to complete our 9th and 10th operated wells by year end, boosting our crude oil production in the fourth quarter. The Akovenko 24-34-2H should be contributing production in November and the Lange 44-31-2H will follow in December. We have completed ten separate financial transactions over the last seven quarters that have resulted in significant increases in available liquidity and we expect to resolve the $27 million of remaining 2013 Convertible Senior Notes due in February 2013 on or before the maturity date."
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