By Ian Gilson, PhD, CFA
On January 28, the company announced the start of a three well development program on its Fredonia Gas Prospect. Several wells will be drilled at offsets to existing wells. These are called Proved Undeveloped locations (PUD locations). These are new wells drilled into existing producing structures are low risk programs.
Recently prepared “Estimate of Reserves” data from Lee Keeling And Associates for the Fredonia Gas Prospect was released by New Western Energy. Remaining recoverable gas reserves of were estimated at 1,185,530 MCF (thousand cubic feet) or 204 BOE (barrels of oil equivalent). This is a four fold increase from the prior estimate. We use BOE in the base reserve date in our pricing and valuation model.
New Western Energy (NWTR) has started the work needed to produce and transport natural gas from the Volunteer and Lander leases in Wilson County, Kansas.
There are a number of producing oil wells on the leases but the infrastructure for production and sale of natural gas needs additional infrastructure. After working on existing wells to increase oil production and access coal gas structures two centrally located gas meters will be installed for the collection and measurement of natural gas production. Water separator systems will be added to remove and dispose of water associated with the gas production. Finally, a connection point will be constructed to the natural gas buyer.
A copy of the full research report can be downloaded here >> New Western Energy Report
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