Re: TMR - They already found a REALLY good well in the BML area - running about 30 MMcf /day. AT $5.00 / Mcf, that's $150,000 per day, $4.5 million per month. That well probably cost about $3.5 million. Another good one would be great. A dry hole would not be the end of the world.
Either way, they will drill more wells in the new BML area, and find the good spots for wells and drill them. Each time they drill, they learn more about the underlying geology and how it matches the 3-D sesimic data thay have.
Often in a new area, the success rate on the first 4-8 wells is only about 50 %. After the first wells, the area is understood much better, in terms of geology ,drilling, production etc. and the rate tends to go up to 80-95% success and the well outputs tend to be a little bigger also. Drilling cost may also go down slightly. After the first wells, the much of rest of the area may be classified as proven undevelloped, or PUD.
TMR is
1) a turn around play - Wall Street was unhappy with TMR, and they had too much debt when gas was $3.50. TMR is not going near BK now, so thsi reason fades a bit.
2) a resource discovery play. This provide lots of upside even if gas goes to $4.50....
3) a natural gas pricing play.
TMR is my largest holding.
However, don't fall in love with a stock.
Ed Ajootian on the Boom Boom Room and the TMR yahoo thread follows TMR. He was recommneding the stock when it was around $2.00 about 5 weeks ago. Now $4.00. Thank you Ed, I got in at $2.65 then more at $3.25.
Who else is finding new fields ?
Looks like ROYL. I would like to get the stock when it goes lower, however. VERY samll stock - Jay & Kastel could buy whole company.
KCS is finding new wells, but they have some issues with ENE (Enron) I don't understand yet, so I won't recommned it. I own it , however. |
