GMX Resources completes Haynesville/Bossier horizontal well with 14.4MMcf/d

Source: GMX Resources

GMX Resources Inc. (GMXR) today announced the completion of the Blocker Heirs #20H Haynesville/Bossier horizontal well with a 14.4 million cubic feet of gas per day ("MMCF/D") initial production ("IP") rate. 

The well was drilled with a 4,450 foot lateral and stimulated with 11 frac stages. The well test was over 24 hours on a 20/64 choke with 5,890 pounds of Flowing Casing Pressure ("FCP") into a sales line with 975 pounds per square inch ("PSI") of Line Pressure ("LP"). 

The IP rate of the Blocker Heirs #20H is slightly higher than the reported IP of the Mia Austin #1H which had an IP rate of 14.1 MMCF/D on a 20/64 choke with 5,492 pounds of FCP. However, the Blocker Heirs #20H was completed with 11 frac stages while the Mia Austin #1H was completed with 12 frac stages. 

The 5 1/2" casing design facilitates the ability to reduce the number of stages and increase the number of perforations, thereby producing greater contact with the reservoir rock and increased transmissibility as evidenced by the higher FCP. The Company expects 30 day production rates and long term performance to be enhanced by the 5 1/2" casing design. 

This is GMXR’s second H/B Hz completion using 5 1/2" casing and the company's highest reported 24 hour IP rate. The Company expects to complete five more H/B Hz wells in Q2 2010 for a total of seven for the quarter and nine year to date. The next scheduled completions are the Verhalen D #3H and the Verhalen E #6H which are expected to be announced before the end of April 2010. Additionally, the Blocker Ware #8H, the Mercer #11H and the Verhalen F #1H are expected to be completed and producing before the end of Q2 2010. 

GMXR continues to increase drilling efficiency and reduce drilling times. The Mercer #11H, the latest well to reach total depth ("TD"), had a spud to TD time of 29 days compared to the Blocker Heirs #20H, the Verhalen E #6H and the Blocker Ware #8H which had spud to TD times of 38 days, 35 days, and 31 days, respectively.  Each day of lower drilling time equates to a savings of approximately $75,000 per day of all in drilling costs. The Company continues to reduce completed well cost ("CWC") based on fewer drilling days, a new casing design, other identified drilling design savings, and fewer frac stages. 

GMXR is a 'Pure Play', E & P Company with one of the most concentrated Haynesville/Bossier (H/B) Horizontal Shale Operations in East Texas. The Company has 355 Bcfe in proved reserves (YE2009), 94% of which are natural gas. The Company's proved reserves are 81% operated and consist of 286 net "Capital Core" H/B Hz un-drilled locations; 16 gross/15.9 net H/B producers and 324 gross/186.9 net Cotton Valley Sand ("CVS") producers; 1,382 net CVS un-drilled locations; and 47 net Travis Peak/Hosston Sands & Pettit producers. These multiple resource layers provide high probability and the potential for repeatable, organic growth.

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