Looks like a sharp slide in NG price. So far GMXR is holding steady. But it does not look very favorable for the longs. Is it dead money? Are there any company-specific news/events to look forward to in the near future?
Thoughtful, You recieved that info when I told you about the two Chesapeake wells that flowed 16 mil/ea. I.P.'s can be used to predict (noticed I said predict) EUR's. If you have 4 mo. continual production along with choke sizes and flowing pressures, thats even better. The tighter the rock (permeability) the longer it takes to reach stabilized flow. If you follow the state potential production test you will notice that most of the big fourteen producers are using 22/64 chokes. Some really strong wells use a little bigger choke to keep frac water returns coming, but for a whole over 50-100 wells many are using 22/64's. If a well comes in at 16mil/day and 6615 psi ( I'm taking this from thr RRC G-1) then I have a very good idea this well could produce 6 Bcf in its life. The more substantial proof will come with the actual production providing it is not shut in,choked back,etc. This was the best news for the value of GMXR since they released the net pay and log results. If these wells can be completed in a way to produce 4 Bcf in their economic life on average and 30,000 out of 42,000 acres is developed, then you have 1.2 tcf recoverable. At a meager 50 cents/mcf reserves in the ground (not proven but getting likely) . That's $20/sh. Over the next year as these reserves are credited to the proven catagory this stock will climb. Of course if gas goes up to $8 tommorow that's even better.I think this stock should already be much higher.
Thanks a lot kilgore, rusty, harehau. I am really learning a lot from these highly informative discussions. A naive question: How did you get that 6 bcf EUR from 16 mil/day IPR? What is the typical production life of a well? Is that IPR 16 mcf/day? That is only 6 mmcf/year. How does that translate to 6 bcf EUR? I am just starting to learn the industry lingo. Thanks y'all.