ngasfor 2013 is now $3.90/mcf or better;with some liquids production gsx is cash flow positive at $3.5/mcf;those 5 tcf of resource potential are beginning to look like the real thing!
Sentiment: Strong Buy
Even after the Wapita JV,gsx has about 5tcf of resource in shallow gas albeit not economic at present gas prices;if ngas gets to the $5/mcf range the resource could be valued at $.10/mcf or about $500 million-even after a 50% discount this still gets to about $1/sh;this possibility is why Wapita invested $35 million in the uinta prospect.If you double down here however all you need is a double to $.30 to get back to even-that's what Ive done;short term the recompletions of the Old Dom wells might create some interest-the operations update next week might be of interest here!
Sentiment: Strong Buy
gsx has two more conf presentations in sept-a repeat of the last talk hpoefully with some updates should be positive going forward!
Green River wells ,according to NFX just north of gsx,have additional potentially productive horizons that could increase EUR by 40%.The push into wasatch-mesaverde wet gas should begin soon as the JV has contacted cryo facilities-the wet gas has about $.50 worth of liquid per well so gas needn't go up to far from here to be profitable.
Old Dominion wells have oil behind the pipe;recompletions cost $50000 and could yield 40b/d;this could be very valuable if true-1000b/d would cost only$1.2 million and yield $80000 /d.They sucked me back in!But at $.11+ willing to play craps for the big hit!
It isn't that unusual to test a well for weeks-Useg and cpxo did so for 2 months;rose also is conservative in this regard-so I'll wait for the results;those who called grant should have asked if he was aware of the results -in the call one of the gsx team implied that they too were anxious to see the data;oxy is very tight about their Ca play-I think this lack of info is more of the same-we'll know the results bad or good soon enough;E&P stocks including gsx have been a bad deal this year probably because of the strong dollar and weak ngas.
has reduced coals share of power production in US from 45% to 36% most of it to ngas.No wonder gas prices have recovered.On the other hand the US is going to release oil from SPR to offset Irans cut but election dynamics seems to be the real reason.pathetic!Explains weakness in oil and oil producers-probably an opportunity to buy E&P after shake out!But watch out below-sell in may go away might again work.
Having worked with lunar rocks I can say that there is no cheese on the moon only very old rocks-some older than 4.4 billion years!As to gsx I'm begining to see the end of the end of nat gas.Rocky is right-the return of nat gas ultimately will determine whether we make a ton on money.Near term success in Ca and the Green river annuity might get us a double from here.But we need gas over $4.Coal plants have switched over and gas drilling is downsizing so there is some hope.
wells were obtained years ago and produce the oil that GSX reports-these are Green River wells and apparently are very long lived ;this supports gsx's analysis and ROR calculations;water flooding may sharply increase the production profile in the future
the wells in the San Joaquin have natural fracturing given the proximity of the pervasive fault system so they are not fraced;would't the well then have strong oil shows if commercial? -would't oxy have good reason to go ahead with completion?Sounds like the apparent delay might give them time to add acreage?
the liquids component adds up to $1 per well so $3/mcf gas is viable;they are now carried in 6 wells in CA-odds are better than even to hit a good well;cash flow,cash and carried interest will support the uinta program-new resources not needed in near term;have 15000 net acres in Ca looking for more?Getting $92/bbs oil in uinta now.Gr with deeper mesa-wasatch makes even these wells viable.CC a b---
note that this"is the first step in a strategy to position" the company outside of the Uinta.Sounds like some positive info coming from willow springs?Or will they apply their cash to other oil/liquid areas?In any case ceo is not simply going to wait for gas to turn!
the release confirms that the Green River oil potential will be developed-read the first two wells are commercial-and that ngas will be developed in the north because of substantial liquids contents-liquids are worth 3-5 times ngas hence even 20% liquid content should make these wells commercial even at sub $3 gas;wapita was not crazy to go to the uinta-so between liquids and GR oil they can wait out the ngas crash.But the best cure for low gas is low gas prices.There is a massive shift to nat gas which bodes well for 2013.and then we still have the giant long shots in California!Gsx sould soon see $.50 or more!
at 10 year low;pending epa fracing rules may result in severe cutback in horizontal ngas drilling;in last up cycal 60,000 megawatts of nat gas power was built and largely unused but now ready to replace 130 dirty coal power plants;if the crazy in EPA go thru with these rules it will make simple verticals in natgas-like those in the Uinta-more valuable once prices rise asIMO they will begin to in 2012.wapita must certainly had this in mind when they put up $60 million for 1/2 of gsx's Uinta.It will be a gas if the Uinta gas resource is what makes gsx whole!And the obvious implication of the approval of gsx's long range drilling plans for 1000+ wells by BOLM.
Typical valuation metric is $100,000 per flowing barrel of oil.at 1600b/d that values useg at $160 million plus their cash,realestate and moly mine.Will hold for a while longer.