Good afternoon,
Please see below announcement from GeoResources, Inc. (the operator of EKA's the Blackjack Springs #1H well) released this morning re: their financial & operating results for the quarter ended June 30. Of particular interest, is the information re: the Blackjack Springs #1H well.
Eureka Energy is in trading halt, pending ASX release to market re: Blackjack Springs.
HOUSTON, Aug 08, 2011 (BUSINESS WIRE) -- GeoResources, Inc. /quotes/zigman/72652/quotes/nls/geoi GEOI +0.74% , today announced its financial and operating results for the three and six month periods ended June 30, 2011. Highlights for the second quarter 2011 include:
-- Initiated successful commercial production operations on its first three wells in its Eagle Ford project area in Fayette County, Texas
-- Continued the successful development and de-risking of its Bakken operated project area in Williams County, North Dakota with the completion of the Muller 1-21-16H
-- Generated Adjusted EBITDAX(1) (non-GAAP) of $20.1 million in the quarter, a 21% increase over the second quarter 2010 and a 11% increase over the first quarter 2011
-- Generated Adjusted Net Income(1) (non-GAAP) of $7.9 million in the quarter, a 29% increase over the second quarter 2010 and a 9% increase over the first quarter 2011
-- Generated Diluted Adjusted Earnings Per Share(1) (non-GAAP) of $0.31/share for the quarter
-- Ended the quarter with $193 million in Liquidity(1) (non-GAAP)
Operational Update
Eagle Ford GeoResources recently completed its third well in its Eagle Ford project area, the Black Jack Springs #1H (44.1% working interest ("W.I.")). This well was drilled with a 5,900 foot lateral and was completed with 16 frac stages. This well averaged 460 boe/d of production over an initial 10 day period while being produced on a restricted choke of 14/64" to 16/64". The Black Jack Springs well is located further northeast in the Company's acreage block and therefore further de-risks the Company's Eagle Ford acreage. The table below summarizes the production data through early August from the Company's first three Eagle Ford wells which are still flowing up the production casing.
Lateral # of Avg. Daily Production (Boe/d)(1) Current
---------------------------------
Length Frac First Current Pressure
(feet) Stages 30 Days Current Choke (PSI)
------- ------ -------- ------------- ------- --------
Flatonia E #1H 3,200 10 391 244 24/64" 225
Flatonia E #2H 4,800 14 465 413 14/64" 1,050
Black Jack Springs #1H 5,900 16 390 (2) 358 18/64" 650
(1) Excludes non-producing days and initial "flow-back" days when well was cleaning up and producing frac fluid. (2) Represents average daily rate for first 22 days of production.
GeoResources is currently preparing to drill its fourth Eagle Ford well in Fayette County, the Peebles Unit #1H (39.8% W.I.), which is anticipated to have an approximate 5,000 foot lateral. The Company has identified a second rig for its Eagle Ford project and this rig could begin drilling operations early in the fourth quarter.
This follows the previous successful wells in the area.
Please see below release from July 06, 2011.
GeoResources, Inc. Provides an Operations Update
HOUSTON--(BUSINESS WIRE)--GeoResources, Inc., (NASDAQ:GEOI), today provided an operations update.
“2,525 Flatonia E Unit #2H ~4,800 14 50.0 % 1,242 480 16/64”
EAGLE FORD
We recently successfully drilled and completed our first two Eagle Ford wells in our operated project area in Fayette County, Texas. The table below provides an overview of production results to date from these wells:
Eagle Ford - Well Summary
Initial Production Data
Lateral
Length
(Feet) # of Frac
Stages GEOI
Working
Interest Daily Oil
Rate
(Bbl/d) Daily Gas
Rate
(Mcf/d) Choke Pressure
(PSI)
Flatonia E Unit #1H ~3,200 10 50.0 % 1,204 420 18/64" 2,525
Flatonia E Unit #2H ~4,800 14 50.0 % 1,242 480 16/64" 2,850
Although we initially produced these wells on the larger choke sizes indicated in the table above, both the Flatonia East Unit #1H and #2H have been flowing on restricted chokes of 12/64” and 10/64”, respectively, since first production. We have intentionally restricted production rates on these wells as we believe that producing on restricted chokes and at lower rates will reduce decline rates and optimize reservoir performance. Excluding the higher initial daily production rates above, the Flatonia East Unit #1H and #2H have averaged 487 and 495 barrels of oil equivalent per day (converting gas at 6 MCF = 1 BO) over the first 14 and 12 days of production, respectively, with average gas-oil ratios of 700 to 800 cubic feet of gas per barrel of oil. Although, gas is currently being flared from these producers, we expect to connect these wells to a gas sales line within the next 60 days as we have recently signed contracts with a purchaser who is installing a gas pipeline through our project area.
We also recently completed drilling our third Eagle Ford well, the Black Jack Springs #1H well, in which we have a 44.1% working interest. This well was drilled with a ~5,900 ft. lateral and is currently undergoing a 16 stage frac job. After drilling the Black Jack Springs #1H well, the drilling rig was moved to drill the West Cannon Unit #1H well in our Giddings Austin Chalk Field development area in Grimes County. The West Cannon well is currently drilling and should finish within the next few weeks. We expect this well to be an “oily” Austin Chalk producer, with strong economics. After drilling the West Cannon Unit, the rig will return to our Eagle Ford project in August 2011 and will continue drilling Eagle Ford wells.
Since April of 2010 we have acquired 24,000 net acres in the Eagle Ford Trend with acreage primarily located in southwest Fayette and northern Gonzalez counties. Our plan is to add a second dedicated drilling rig in the fall of 2011 and a third rig in early 2012 and potentially a 4th rig in mid-2012. Our intent is to significantly accelerate our Eagle Ford drilling in the second half of 2011 and into 2012. As we move forward in our development of this project area, we expect each of our operated rigs to drill 8-10 gross wells per year.