The weighted average price for natural gas at the NWP Rky Mt Hub where GSX sells its unhedged production was $1.99/mmbtu today (down 6 cents from yesterday). Looks like I did not miss anything while I was out of pocket. I did talk to one of the two shareholders that attended the annual meeting last week and was given a summation of the meeting. Very surprised that GSX has not moved to a new 52 week low following the release of the outcome of the primary target for the Willow Springs Prospect. It now appears unlikely that a second well will be drilled on this prospect by Vintage in 2012. This may also influence if a well is drilled at SW Cymeric following the evaluation of 3-D seismic as it is relatively close to Willow Springs. It now appears extremely unlikely that warrants will be exercised at 35 cents which would have raised about $10.5 million for GSX. GSX had $7.8 million on March 31st and no credit. CAPEX for 2012 is $5 million (will be spent in 2H 2012) which leaves $2.8 million to pay the management and production expenses. Its enough to pay M&A for the 2nd & 3rd quarters if production were at break even which it is not. How is GSX going to raise at least $10 million so that they can survive into the 2H of 2013???? Perhaps sell the remainder of their Utah assets to Wapiti or ?????
I too am surprised this stock has not tanked. it is up again today over .18. Why? Based on the poor willow springs well, low natural gas prices and no other wells in the near future to look forward to, I am puzzled how this stock is slowly moving up. I am glad it is but I have no confidence that it will last. If they had plenty of cash on hand then I could understand because investors could wait it out but we all know that Gasco doesn't have plenty of cash on hand so what is up this stock?
Rky, Below is the statement from GSX, what is a completion rig well?
In Gasco's Willow Springs Prospect, the partners have completed testing the deepest objective in this well bore which features additional up-hole pay potential. Oil was produced from the deepest objective, however, hydrocarbon quantities were deemed uneconomic. There is a completion rig on location which is preparing to move up the well bore to test the next potential pay horizon. Testing of the deepest objective did confirm the presence of a structure which helps confirm the Company's geologic model. Initial wireline log analysis indicated potential additional zones of interest uphole. Testing in the next pay horizon should be undertaken in the near future. Gasco looks forward to updating investors on the well's progress when it receives further information.
"natural gas will sell for $5/btu in winter" not gonna happen in the winter of 2012/2013. NYMEX futures which sell for a premium for natural gas vary from $3.06 to $3.23 per mmbtu into the spring of 2013. Actual prices may be anywhere from $2 to $3 per mmbtu this winter in Utah. Also production has been reduced by 50% because of the sale to Wapiti.... And GSX will be out of cash this fall or winter....... So how is GSX gonna get to 50 cents per share?????
the zone that Vintage tested was the primary zone of interest and reportedly had the best shows in the well. one never knows until a well is finished being tested but the odds of the Willow Springs well being a commercial discovery are minimal..... the same rumors suggest that there is a 3rd zone that will be evaluated in this well....