Since the switch of well completion from the weak fast sliding sleeve method to the old powerful slow perf & plug method, the effective radius of artificial fracking can be significantly increased. This has resulted an increase of IP and later flow rates by more than 30%.
The 3 townships, 145N99W, 146N99W & 147N99W, are sandwitched between Little Mo anticline and the west shear plane of Billings Nose uplifts. GMXR has 3 producers completed by the sliding sleeve, Akovenko-1H IP 1483 BOPD; Johnston-1H IP 1480 BOPD; Lange-1H IP 2550 BOPD. The new Akovenko-2H was perf & plug completed, IP 3030 BOPD. If the Lange-2H (parallel to 1H) gets IP 3000 BOPD, and Heiser-1H does the same, then these 3 townships can be estimated as 500 BOPD/well steady flow rate field.
There are 17 GMXR units in these 3 townships, or a minimum of 34 long lateral wells. If there is sufficient funds to use MULTIPLE rigs next year. After 3+7=10 wells started production, the steady flowing rate can be greater than 2500 BOPD, with 24 wells to go. At the current price of $140K/BOPD flowing production, the future market value of these leases could be $300M by the end of 2013.
That would be Akovenko -1H, -2H; Lange-1H & -2H; Johnston -1H; Heiser-1H; plus 4 more new wells.
The CVS sale of $69M can fund the existing drilling plan (Lange & Heiser in McKenzie, 2 Fairfields in Billings, 1 test well in Niobrara, 1 well each in H/B & CVS). The 4 more new wells in Mckenzie need to find funding.
By using double-well pads, each new well will cost around $8M in McKenzie, A $32M additional investment can boost the lease values in these 3 townships to $300M.
In addition, there are 16 Mckenzie units in townships 148N98W, 146N98W & 145N98W, a minimum of 32 long lateral wells. CLR and Burlington have de-risked these leases. If there is sufficient funding to drill 8 new wells, it can achieve 2500 BOPD steady flowing rate. That would be another $300M value.