Thursday, December 1, 2011

GMX Hints at Deep Oil in Texas Again

In a press release yesterday to announce the $50 million sale of a volumetric production payment (VPP) transaction for producing Haynesville acreage in Harrison and Panola Counties, TX with EDF Trading North America, a U.S. subsidiary of French utility EDF, S.A., GMX specifically noted, "GMXR will retain all of its oil and NGL production associated with the VPP interests and all of its undeveloped locations."

Since the deal was for the production associated with the Haynesville layer, this reader's natural assumption is that GMX is hinting at the possibility of deep oil in this area.  The wording is a bit murky because it could be referencing shallow oil, but that wouldn't have been part of the deal anyway since it is for Haynesville production.  Is this a case of imprecise writing or investor teasing?

Later in the release, GMX notes that the company has completed a previously disclosed 33 acre 3D seismic shoot of its Crossroads acreage in Harrison Co. to "aid in a more complete assessment of several oil targets and proven natural gas developments." Again, are they referencing the rumored deep oil or shallower prospects?

Talking about the possibility of deep oil is nothing new for GMX, which has been referencing it in investor presentations since May 2011 but acting sketchy about it all along.  The references are generally hints and suggestions - not tangible results.  We continue to watch GMX for news and results (especially for re-entry candidates), but the company has not operated a rig in east Texas since July 2011.

1 comment:

Anonymous said...

The 3D rumor has it were looking for deep reefs below the Haynesville containing oil.