OKLAHOMA CITY, April 19, 2010 (GLOBE NEWSWIRE) -- GMX Resources Inc. (NYSE:GMXR) (visit www.gmxresources.com to view the most recent Company presentation and for more information on the Company) today announced the completion of the Blocker Heirs #20H Haynesville/Bossier ("H/B") horizontal well ("Hz") 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 ½" 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 ½" casing design.
This is the Company's second H/B Hz completion using 5 ½" 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.
The Company 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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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 Company's financing plans and objectives, drilling plans and objectives, related exploration and development costs, number and location of planned wells, reserve estimates and values, statements regarding the quality of the Company's properties and potential reserve and production levels. 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.