GMX RESOURCES INC. Closes East Texas Asset Sale; Provides an Operational Update and Announces Date for Third Quarter Earnings Call
OKLAHOMA CITY, Oct. 24, 2012 (GLOBE NEWSWIRE) -- GMX RESOURCES INC. (NYSE: GMXR), an oil and gas exploration and production Company with assets in the Williston Basin, Denver Julesburg Basin and East Texas Basin provides a Company update.
East Texas Asset Sale
Today the Company announces that it has received cash proceeds from the previously announced $69 million sale of a portion of Cotton Valley Sands and shallower formation properties in East Texas and Louisiana to a private third party. The liens were released from the Trustee and the Closing documents were signed on October 23, 2012. The effective date of the sale is September 1, 2012.
In East Texas the Company is retaining its entire Haynesville / Bossier natural gas resource base: approximately 40,000 gross (30,000 net) mineral acres containing 38 producing wells and 200 BCF of proved reserves, as well as significant potential reserves. In addition, the Company is retaining Cotton Valley Sands and shallow rights across approximately 13,130 net acres that include 28 undeveloped horizontal locations within its East Texas core position.
The Company will provide transitional services to the buyer to minimize any impact of the sale, including physical well operation, land, accounting, operations and marketing services, for a minimum period of three months.
The company is currently developing its oil resource acreage in the Williston Basin, approximately 36,000 acres, with 8 oil producers in the Bakken & Three Forks, plus 222 operated locations and 260 remaining locations many potentially operated.
The Akovenko 24-34-2H, in which the Company has a 92% working interest, is the first Company-drilled well with oil-based mud. The well is located in Sections 27 & 34, Township 146N, Range 99W in McKenzie County North Dakota. The well reached total depth in less than 30 days and drilling costs were $4 million, in line with our estimates. The plug and perf completion is targeting the Middle Bakken, and we expect oil production to be in early November. This well will be the first plug and perf completion in McKenzie County for GMXR in the Middle Bakken and in a lateral drilled with oil-based mud. Fracture stimulation of the 40-stage well began this week.
The Lange 44-31-2H, in which the Company has a 89% working interest, is located in Sections 30 & 31, Township 147N, Range 99W in McKenzie County North Dakota. We expect the well to take approximately 30 days to reach total depth which will occur in early November. The well will be our second well drilled with oil-based mud and will be completed with a plug and perf fracture stimulation.
Michael J. Rohleder, the Company's President, said, "Now that the East Texas asset sale has closed and provides funding into 2013, we can focus on remaining near-term catalysts for our shareholders, which include, higher daily oil production through improved completions, lower costs per well and more wells drilled per rig per year. We expect to complete our 9th and 10th operated wells by year end, boosting our crude oil production in the fourth quarter. The Akovenko 24-34-2H should be contributing production in November and the Lange 44-31-2H will follow in December. We have completed ten separate financial transactions over the last seven quarters that have resulted in significant increases in available liquidity and we expect to resolve the $27 million of remaining 2013 Convertible Senior Notes due in February 2013 on or before the maturity date."
Third Quarter 2012 Earnings Release Date and Conference Call
The Company will release its 2012 third quarter financial and operational results after the close of trading on the New York Stock Exchange on Wednesday, November 7, 2012.
The Company has scheduled a conference call for Thursday, November 8, 2012 at 8:00 a.m. CST (9:00 a.m. EST) to discuss third quarter 2012 financial and operating results. To access the call, domestic participants should dial (877) 303-9132 and international participants should dial (408) 337-0136 prior to the conference call start time. Please refer to conference code 53670688. A presentation pertaining to this call will be available on the Company's website prior to the start of the call at www.gmxresources.com.
Participants are encouraged to access the live audio webcast of the conference call through the following web link or be accessing the webcast through the Company's website.
GMXR is a resource play rich exploration and production Company. Oil shale resources are located in the Williston Basin, North Dakota & Montana targeting the Bakken Petroleum System and in the DJ Basin, Wyoming targeting the Niobrara Petroleum System; both plays are estimated 90% oil. Our natural gas resources are located in the East Texas Basin, in the Haynesville/Bossier gas shale and the Cotton Valley Sand Formation, where the majority of our acreage is contiguous, with infrastructure in place and substantially all held by production. The Company believes these oil and natural gas resource plays provide a substantial inventory of operated, high probability, repeatable, organic growth opportunities. The Company's multiple basin strategy provides flexibility to allocate capital to achieve the highest risk adjusted rate of return, with both oil and natural gas resources throughout our portfolio.
The GMX RESOURCES INC. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5158
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 number and location of planned wells, statements regarding the quality of the Company's properties and resource potential. 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.