Miller,
Glad you are aboard Miller and thanks for your generous comments. According to the information I have read, CWEI is performing a 3-D seismic survey of 20,000 acres in its North Giddings Block to determine if seismic features can be identified in the Cotton Valley Haynesville formation at depths of 15,000 to 16,000 feet indicating the presence of pinnacle reef formations. The northern edge of the North Giddings Block is approximately 24 miles southwest of the nearest current Cotton Valley production. They have retained geologist Ed Norwood "Mr. Norwood was instrumental in the discovery of several major Cotton Valley Reef wells in East Texas for Marathon Oil Company, a leader in the exploration and development of the Cotton Valley Reef Play." The $3.1M 3-D contract is with Tidelands Geophysical Co. of Plano, TX; the survey is to completed in the '97 first quarter; analysis of the data in the second quarter, and I would hope drilling would begin in the third quarter (can you add any info to the time frame). According to statistics, the probability of success on a pinnacle reef well is up to 42%. CWEI, in their Secondary Offering prospectus states "Approximately half of the wells drilled northeast of the North Giddings Block in search of Cotton Valley pinnacle reefs have been productive." They also state: The Company estimates that a completed Cotton Valley pinnacle reef well would cost $4M." CWEI, according to the last information I have, has a $42M capital expenditure plan for '97, and had estimated an additional $5M for the 3-D seismic survey. From their prospectus, "The Company's current policy is to limit its Cotton Valley Exploratory Project expenditures to not more than 25% of its planned annual capital expenditures." I was guessing that it would take 3 months to drill a 15,000-16,000 foot well; Miller perhaps you can enlighten us on this. CWEI now has three drilling rigs and I don't know how many of these rigs would be put to work in the pinnacle reef play. By the way, CWEI is now at 16 3/8, so it is a good day; glad you have joined this thread.
Buzz |
