AMU 0.00% 21.0¢ amadeus energy limited

fantastic drill success in us gas play

  1. 396 Posts.
    What a ripper of an announcement!

    Brief summary (hard not to get carried away as you can see):

    * Wilson #26 cased for production. This is old news. But the really interesting addition is that three oil-bearing zones (with 14’, 22’ and 6’ of net pay) have been intersected, and the success of the well has created at least two additional close offset drilling opportunities. These will be added to the intensive drill program already underway on Raccoon Bend (i.e. another 2 to add to the balance of 28 wells planned for 2005). Surely this must mean even more oil production on the way.

    * Butschek #1 has reached target depth (surprised me that it did so this quickly) and has been logged a cored. Found most of the pay zones in nearby Gerdes #1(notably two zones with 52’ of net pay). Suggests areal extent of gas accumulation exceeds 300 acres (excellent news). Indicates a 5-6 zone, 3-6 well Wilcox field is present. (In other words, this prospect can support quite a few more producers – and with each of these wells likely to deliver US$600,000 to US$900,000 to AMU’s bottom line, at current gas prices, that is a damned impressive story).

    * Rash Barrett #5 and #6 have been completed and fracced, and will go on production as soon as electricity is hooked up. Given that initial flow rates were expected to be around 100 and 120 bopd, does this fraccing hold the promise for even higher flow rates? Nice if this were the case.

    And finally, saving the best until last …
    * Byczynski #1 is flagged as a likely SUBSTANTIAL PRODUCER (don’t you just love those words) with at least 6 productive gas-bearing zones intersected. The star zone has a potential gas column of 162’, with likely reserves in the range of 12 to 19 bilion cubic feet. Only that zone is likely to produced from this well. Further drilling will be conducted in the vicinity to produce from zones not tapped in Byczynski #1. (Which means you can add a couple more lovely commercial gas producers to AMU’s inventory of assets).

    Excellent news all round. The level of profits associated with this deep gas play and the decades-long period over which they can be expected to flow will be impressive indeed. This should certainly warrant a re-rating of the company.

    (I hold so of course I’m biased. And as always, your money, your choice)

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