OKLAHOMA CITY, June 14 /PRNewswire-FirstCall/ -- GMX RESOURCES INC. , (http://www.gmxresources.com/ ) announced additional information with respect to its previously announced deeper Cotton Valley layer completions and a conference call to discuss the operational implications.
Based on log analysis completed by the Company's independent service providers, the Company has estimated the incremental net reserves from the lower CV layers recently encountered per well to be 0.4 to 1.3 Bcfe. This is based on estimated gas in place per section of 108-160 Bcfe and estimated gas recoveries of 8-16%. The Company has 25 net sections. The Company estimates the incremental cost to complete in the lower sections to be a range of $500,000 to $1,000,000 depending on the degree of fracture stimulation used, which results in a cost per mmcfe ranging from $1.25 to $0.77, of additional reserves added to its existing well.
The Company does not anticipate that the strategy to complete in the lower levels will result in a material change to its current estimate of wells to be drilled in 2006, but this estimate remains dependent on rig availabilities. Completion times for the wells with lower CV levels will likely take longer, resulting in time from spud to completion and production of 60 to 90 days, including the Taylor sand that we normally complete in the production string.
In commenting on the new reserve additions, Ken L. Kenworthy, Jr. Chief Executive Officer stated, "Our initial reserve estimates based on log analysis suggest the recovery of these reserves at the estimated initial costs are very economical, especially at the upper range of the reserve estimates. Therefore, the long term value we will build for shareholders is worth this effort, despite that fact that it may result in some short term reductions in production from our previous estimates for 2006."
Teleconference call and webcast:
GMX RESOURCES INC. will discuss an operational update in a conference call followed by a question and answer session on Thursday, June 15, 2006 at 10:00 a.m. Eastern Time. You can participate via telephone by dialing 800-795-1259 and referring to conference ID "GMX" five to ten minutes before the scheduled start of the conference call. You can also access the conference call via Internet webcast by logging on to the Company's website at http://www.gmxresources.com/ at least 20 minutes prior to the scheduled start of the call to download and install any necessary audio software. You can find the Internet webcast link under the Investor Relations tab where you will be required to register your name and email address. You must have either Microsoft Media Player or Real Player to access the conference call. During the conference call periodically the company's most recent presentation, on its website will be utilized. An on-demand replay of the teleconference call will be available until June 30, 2006 by calling 800-688-4915 referring to conference ID "GMX" and the web-cast will be available on GMXR's website until June 30, 2006.
GMX RESOURCES INC. is a rapidly growing independent E & P company. Key Gas Resource Play in Cotton Valley Sands, Travis Peak Sands & Pettit Limes; North Carthage Field, East Texas, Panola & Harrison County; "Tight Gas Sands" on the Sabine Uplift; 93% Natural Gas; Core Area: 99% of NAV; Stacked Multiple Reservoirs; Drilled 68 CVS Wells, 7 Travis Peak Wells since inception in 1998; 26,853 gross / 15,948 net acres; 619 gross / 374 net CVS 40 acre locations; 7 Yrs of Development with 6 Rigs. Headquartered in Oklahoma City, Oklahoma, GMXR has interests in 114 gross/68.13 net producing wells and operates 67% of its reserves. YTD price range $50.50 - $28.65; Average Daily Volume 90 days - 296,000 shares; Common Stock Outstanding - 11,214,967 shares; Institutional Ownership approximately 60% at December 31, 2005; Management maintains 22% equity stake. The Company's strategy is to develop its resource play with multiple rigs, increase production, grow its natural gas reserves and continue to build shareholder value.
This press release includes certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the company expects, believes or anticipates will or may occur in the future are forward-looking statements. They include statements regarding the company's financing plans and objectives, drilling plans and objectives, related exploration and development costs, number and location of planned wells, reserve estimates and values, statements regarding the quality of the company's properties and potential reserve and production levels. These statements are based on certain assumptions and analysis made by the company in light of its experience and perception of historical trends, current conditions, expected future developments, and other factors it believes appropriate in the circumstances, including the assumption that there will be no material change in the operating environment for the company's properties. Such statements are subject to a number of risks, including but not limited to commodity price risks, drilling and production risks, risks relating to the company's ability to obtain financing for its planned activities, risks related to weather and unforeseen events, governmental regulatory risks and other risks, many of which are beyond the control of the company. Reference is made to the company's reports filed with the Securities and Exchange Commission for a more detailed disclosure of the risks. For all these reasons, actual results or developments may differ materially from those projected in the forward-looking statements.
