Management discussion, analysis and financials are available on Sedar
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Major highlights
20 wells planned for reentry workover due to oil prices & technology
Company staffs one leased work-over rig, employs another contract rig, and does its own roustabout work, hauling, heavy equipment work and gauging.
2-3 "new" wells planned for second and third quarter 2008
Formations in new wells estimate 100-250 BOED initially
Funding for next 2-3 wells will come from a private equity sourceL
Funding more wells will come from cash flow
The company had a net loss in the current year of $5,544,156 compared to $456,051 in the same quarter of 2006. The primary cause of this is an Impairment charge of $7,821,048 given to Louisina and Texas property. This is offset by a $2,412,00 future income tax recovery. My opinion is that this is a smart tax right off and better than selling the property. By doing this they improve cash flow, retain title of property and can reverse the transaction at a later date. They simply have too many irons in the fire and are better to focus all resources close to head office. NOTHING has changed in regards to the properties P90+P50+P10 reserves.
"It is noteworthy to mention that Pelahatchie Field has a CO2 pipeline running through the field to another operators enhanced recovery projects east of the field" {Denbury Resources #1 operator in Mississippi}
In April 2008 the company plumbed the Karges #1 well and readied for production. (THIS IS THE WELL THAT WESTFORT & PATTERSON did in 2001). The well should have produced 500 BOE per day if it was cemented properly. In a recent test it flowed at 75 BOE per day plus gas. Company is adding another separator to control excessive flow of oil to the flare stack.
Karges 18-3#1 well has confirmed behind pipe oil & gas
Karges 18-3 1A well drilled in last quarter of 2007 has already recovered seventy-five percent of the cost.
Karges 18-7#1 & Jcox 18-10#1 are now being redied for production.
