Wednesday, April 14, 2010

More on GMX

In a press release touting a new well yesterday, GMX mentioned a couple of moves that I read as aimed at cost savings or creating efficiencies in a low commodity price environment.

First, the company announced that it has subleased one of its four Helmerich & Payne rigs, currently on a three year lease, to another producer for six months. 

Second, GMX noted that it has entered into a Joint Operating Agreement with Exco Resources to develop a 3,850 acre contiguous block in the Scottsville area of Harrison County.  GMX is contributing the Verhalen prospect (exclusive of the seven producing Verhalen wells) for an 84.3% interest, and Exco is contributing its rights in the Hamilton Unit for a 15.7% interest.  The JOA represents 49 possible drilling locations assuming 80 acre spacing.  The first well in the JOA, the Verhalen "F" #1H was spud on March 29, 2010.  The move slightly reduces GMX's capital expenditures as well as some of its future production.

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