Black Dragon Resource Companies, Inc. announced CEO Dr. Bailey has reported he has received a number of shareholder calls questioning Dragon's recent volatility. In response, he stated that the movement must be related to the recent positive press releases on cost reduction efforts and new projects being pursued to immediately improve the company's revenue stream.
One of the most upside potential benefits could be from the reported 640 acre lease position in Caddo Parish. On contiguous acreage to the Dragon lease, a Cotton Valley well that was discovered in 2008 came in at 11 million cf per day, which represents in today's market of $4 gas around $1,320,000 per month, and has maintained an average of $340,000 per month.
On other contiguous acreage to Dragon's new leasehold, a Haynesville shale well was recently completed and came in doing over 1.6 million cf per day, which is 48 million cf per month, with an additional 600 bbls of oil per month. This well generates $200,000 per month. Dragon only owns a 4% royalty of Haynesville shale in this new lease but it can capture significant such revenue on new wells drilled, and it owns 84% of all other zones (including the Cotton Valley).
Dragon has contracted Petrolind Drilling Company to drill up to 3 wells on the new lease. Based on these successful completions in the immediate vicinity, Dragon is optimistic that these same proven zones will also be contained within the depths of its new lease.
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