CWEI closed @ 13 5/8, -1/4, Bid 13 1/2 X Ask 14 1/8....Vol..21.6K
Another very low volume day, and a down day at that. The MM keeps enlarging the spread. With a spread that wide it probably discourages both buyers and sellers. It is difficult to have the patience to wait for the earnings announcement. Oil prices made a very nice gain today.
Oil $20.94, up 0.45 (CWEI received $18.78 in Q1 1996)
Natural Gas, $1.88, up 0.04 (CWEI received $2.29 in Q1 1996)
CWEI receives a premium for the liquids in its natural gas, on top of
the stated priced.
A news article on pinnacle reef wells:
Union Pacific Resources Group Inc. Announces Cotton Valley Pinnacle
Reef Agreements
FORT WORTH, Texas, March 6 /PRNewsire/ -- Union Pacific Resources Group Inc. (UPR) (NYSE: UPR) announced the execution of three separate agreements which will enhance its position in the prolific Cotton Valley Pinnacle Reef play in East Texas. Collectively, the agreements provide UPR an interest in three producing wells, five wells currently drilling, fourteen potential drill sites and a large 3-D seismic shoot. The agreements strengthen UPR's Cotton Valley acreage position which currently exceeds 485,000 gross acres and 312,000 net acres.
Under the first agreement, UPR purchased the interest of Jordan Oil & Gas Company, L.P. (Jordan) in three producing wells, three wells which are currently drilling and the license to 3-D seismic data and leasehold interest in approximately 5,000 net acres. UPR has identified at least 10 Cotton Valley Pinnacle Reef prospects on the Jordan acreage. By agreement of the parties, the terms of the transaction were not disclosed. The producing wells include the Pearlstone #1 and the Frost #2 both of which are operated by American Cometra and the Scurlock #1, operated by Sonat Exploration. These three wells, located in Freestone County, Texas, are producing at a combined gross rate of 48 million cubic feet per day (MMcfd) of
natural gas. After payout, UPR's net share of this production will exceed 15.5 MMcfd. Detailed information regarding UPR's interest in the wells involved in the Jordan acquisition is contained in the Agreement Summary table below.
UPR and Jordan are partners in a separate joint exploration agreement in Smith County, Texas where a 3-D seismic acquisition is under way.
The second agreement is a farm-in agreement with Amoco Production Company (Amoco). The agreement calls for UPR to drill and operate up to four Cotton Valley Pinnacle Reef tests in Leon County, Texas which have been identified using 3-D seismic data shot by Amoco. The first well, the Bearcat #1 Unit, is currently drilling and the second well, the Thunderbolt Unit #1, will commence drilling by April 1, 1997. Information relative to the wells in this agreement may be found in the following Agreement Summary. The remaining two wells under the Amoco agreement will be identified in the near future. This agreement brings the technical strengths of UPR and Amoco together for a collaborative exploration effort.
Under the terms of the third agreement with T-BAR-X Limited Company (T-BAR-X), UPR is drilling the Lightning #1 well in Roberson County, Texas and has an option on three more locations which are being evaluated. UPR's interest in this well is detailed in the Agreement Summary. The Bearcat #1, the Thunderbolt #1 and the Lightning well are in the vicinity of the Marathon Riley Trust #2 well which is currently producing 30 MMcfd.
Separate from the above agreements, UPR is undertaking several 3-D seismic programs which include obtaining seismic data covering approximately 200 square miles to be shot in 1997. The data should provide UPR additional drilling opportunities in late 1997 and 1998 subject to the interpretations of these surveys.
"The Cotton Valley Pinnacle Reef play in East Texas is one of the most active and significant domestic plays of the past several years and has been brought about by the use of modern 3-D seismic technology," said Jack L. Messman, chairman of the board and chief executive officer of UPR. "These agreements, UPR's strong acreage position, our technological skills and our continuing purchase of additional acreage will position UPR to be the dominant producer in this trend."
Union Pacific Resource Group Inc is the nation's largest domestic independent oil and gas production company. Headquartered in Fort Worth, Texas, UPR has been the # 1 domestic driller for the past five years.
Agreement Summary
JORDAN AGREEMENT
UPR Working
Well Name Status Interest Comments
Pearlstone #1 Producing 33.4% Initial rate of 13 MMcfd
Frost #2 Producing 5% Initial rate of 25 MMcfd;
5% converts
to 40% after payout (APO)
Scurlock #1 Producing 13.3% Initial rate of 10.3 MMcfd
Vann #3 Drilling 8% 8% converts to 16% APO
HLP #1 Drilling 10% 10% converts to 20% APO
Carbalan #2 Drilling 40%
AMOCO AGREEMENT
UPR Working
Well Name Status Interest Comments
Bearcat #1 Drilling 100% 100% reduced to 43.75% APO
Thunderbolt #1 Pending 100% Will spud 4/1/97;
100% reduced to 43.75% APO
T-BAR-X AGREEMENT
UPR Working
Well Name Status Interest Comments
Lightning #1 Drilling 100% 100% reduced to 50% APO
SOURCE Union Pacific Resources Group Inc. |
