GMX Resources Inc., Oklahoma City, (NYSE: GMXR) has forecast a 2010 capex budget of $175 million, with the majority to be spend on 20 Haynesville/Bossier wells and two Cotton Valley Sand wells.
GMX completed the Mia Austin #1H in February targeting the East Texas Haynesville/Bossier with an initial production rate of 14.1 million cubic feet of gas equivalent per day, the company’s most successful well. The well was tested on a choke size of 20/64 inches with flowing tubing pressure of 5,492 pounds per square inch into a sales line that had 850 psig. The company projects the well will average more than 7.5 million cubic feet equivalent per day for its first 30 days.
The Verhalen E#1H in East Texas was recently completed and had an initial production of 8.3 million cubic feet of gas per day with 3,870 pounds per square inch of tubing pressure. The well was tested on a 18/64-inch choke into a 640 psig sales line. GMX expects two additional completions during March and April.
GMX is drilling with three Helmerich and Payne FlexRig 3 rigs and is scheduled to take delivery of a fourth rig on March 25. The company expects to enter a sublease agreement with another operator for the fourth rig, allowing GMX to begin the official contract period and defray the majority of the contracted day rate until the expiration of the sublease or such time as we call back the rig from the sub-lessee and choose to expand our drilling program to four rigs.
GMX chairman and chief executive Ken L. Kenworthy Jr. says, “The potential of the Haynesville/Bossier play was confirmed in the form of growing production with only one rig, drilling 12 Haynesville/Bossier horizontal wells in 2009 at a capex of $178 million versus seven rigs and drilling 89 Cotton Valley wells at a capex of $323 million in 2008.”
He adds, “By reducing our drilling and completion costs 54% during the year we also managed to deliver best results with our most successful well, the Mia Austin #1H. The well began production in early February and will produce 230 million cubic feet in its first month, a 40% improvement when compared to our best completions. It is one of the highest producing wells in East Texas and it along with the surrounding successful wells confirms the opportunity we have on our property base.”
GMX has oil and gas operations in Texas, Louisiana and New Mexico.
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