Press Release Source: GMX RESOURCES INC.
GMX RESOURCES INC. Announces Completion and Drilling Results in 100% Owned Wells in East Texas; Gas Sales of Morrow Well in New Mexico and Operational Update
Friday September 16, 8:00 am ET
OKLAHOMA CITY, Sept. 16 /PRNewswire-FirstCall/ -- GMX RESOURCES INC., (Nasdaq: GMXR - News); (Warrants: GMXRW), (visit gmxresources.com for more information on the Company and warrants). GMXR announces that the Company has fracture treated the Taylor Sand of the Cotton Valley Sand ("CVS") in its first well, the Underwood #1, located in its East Texas 100% Area on September 7, 2005. The well flowed at its highest rate 1,500 mcfepd up 5 1/2" casing and still recovering load (flowing back the water used in the treatment). Drilling has commenced on a second well with McLachlan Drilling Company Rig #5 in its East Texas GMXR 100% Area where it has operations, 100% working interest and over 190 Net CVS locations. In New Mexico, the Gosden BGI #1 began producing on August 10, 2005 and is currently making 3,300 mcfgpd & 150 bopd with 1,300 pounds flowing tubing pressure.
Operational and Joint Development Update:
3Q05 to Date & 2005 Planned Activity JV 30% and 50% Areas
Penn Virginia Oil & Gas, L.P. ("PVOG"), a subsidiary of Penn Virginia Corporation (NYSE: PVA - News) has spud 6 wells, 5 in the GMXR/PVA 30% Interest Area (JV 30% Area) and 1 in the GMXR/PVA 50% Interest Area (JV 50% Area). Five wells have been completed in the JV 30% Area. PVOG is currently drilling the 13th and 14th wells this year, which are wells number 31 & 32 in the JV Areas, since drilling began in early 2004. Completion of the two carried wells (20% GMXR) in the GMXR/PVA 50% Area should begin soon, pipeline construction is nearly completed. Ken Kenworthy, Jr., Chief Executive Officer of GMXR stated, "Production results have been strong in several recent second stage completions, apparently due to an Upper Sand member in the CVS. This sand is present in numerous wells on most of our property base which includes our GMXR 100% Area."
3Q05 to Date & 2005 Planned Activity GMXR 100% Area
The Underwood #1 was stimulated in the Taylor Sand, with a "Hybrid Frac" on September 7, in the Taylor Sand of the CVS. The treatment included 12,183 barrels (slick water and gel) and 241,000 pounds of resin coated sand. On Thursday the well was flowing at a rate 1,000 mcfgpd & 20 barrels of load per hour and continuing to recover the remainder of the load. The Taylor Sand will be shut-in temporarily for a second stage treatment of the Upper CVS. A smaller treatment will be performed on or about September 22, 2005, eventually both zones will be produced together. McLachlan Rig #5 is drilling below surface casing at 1,175 feet using one triplex pump and one duplex pump. The other rebuilt triplex pump GMXR acquired in April, 2005 is undergoing further reconditioning. GMXR is expecting the second rebuilt triplex pump to be returned in working order within a few weeks. Unit Drilling Rig #309, which GMXR is sharing with PVOG, is scheduled to return to the GMXR 100% Area in late October to drill three additional 100% wells. GMXR will continue to look for additional rigs for drilling Travis Peak twins in the GMXR 100% Area, as well as more CVS development.
New Mexico
In Lea County, the Gosden BGI State #1 was completed naturally, without stimulation and has produced since August 10, 2005 with a normal drop in flow rates and pressure. Plans are to begin development drilling around the Morrow sand producer in the coming months. In the north and south offsets, the Company will have a 7.7% working interest and a 2.2% overriding royalty interest before payout and a 14.57% working interest with a 12.75% net revenue interest after payout (APO). In all other Morrow wells in each unit, our interest will be the APO interest.
GMX RESOURCES INC. is an independent natural gas producer, headquartered in Oklahoma City, Oklahoma. GMXR has interests in 80 gross/49.68 net producing wells and 22,697 gross acres with 13,450 net acres (1H05) in Texas, Louisiana & New Mexico. GMXR also has a large inventory of development prospects in North Carthage Field of East Texas as follows: 67 gross- 39 net Cotton Valley Sand (CVS) proved undeveloped wells (YE04), 134 gross- 88 net (1H05) CVS probable locations on 160-80 acre density and 317 gross- 186 net (1H05) probable CVS locations on 40 acre density. The Company's strategy is to drill and complete CVS wells, which could significantly grow production, grow its natural gas reserves and build shareholder value.
This press release includes certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the company expects, believes or anticipates will or may occur in the future are forward-looking statements. They include statements regarding the company's financing plans and objectives, drilling plans and objectives, related exploration and development costs, number and location of planned wells, reserve estimates and values, statements regarding the quality of the company's properties and potential reserve and production levels. These statements are based on certain assumptions and analysis made by the company in light of its experience and perception of historical trends, current conditions, expected future developments, and other factors it believes appropriate in the circumstances, including the assumption that there will be no material change in the operating environment for the company's properties. Such statements are subject to a number of risks, including but not limited to commodity price risks, drilling and production risks, risks relating to the company's ability to obtain financing for its planned activities, risks related to weather and unforeseen events, governmental regulatory risks and other risks, many of which are beyond the control of the company. Reference is made to the company's reports filed with the Securities and Exchange Commission for a more detailed disclosure of the risks. For all these reasons, actual results or developments may differ materially from those projected in the forward-looking statements.
Source: GMX RESOURCES INC. |
