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OKLAHOMA CITY, Sep 29, 2009 (GlobeNewswire via COMTEX News Network) -- GMXR (Nasdaq:GMXR) (please visit www.gmxresources.com to view the latest corporate presentation) today announced Michael J. Rohleder, President and James A. Merrill, CFO will present at the IPAA OGIS San Francisco Conference on September 30, 2009 at 4:10 PM (PDT) in the Presidio Room of the Palace Hotel located at 2 New Montgomery Street, San Francisco, CA. The presentation will be available via webcast from the following link(http://www.vcall.com/IC/newCoLocated.asp?ID=149924). This link is also available on the GMXR website under the investor relations tab. A copy of the IPAA presentation will be posted on the Company's website Tuesday, September 29, 2009. The Company's production for the three months ended September 30, 2009 is estimated to be 3.4 billion cubic feet equivalent ("Bcfe") of natural gas, which is in-line with previous Company guidance. The third quarter of 2009's estimated production is a 2% increase from 3.3 Bcfe in the second quarter of 2009 and a 4% decrease from 3.5 Bcfe in the third quarter of 2008. Since the second quarter of 2009, the Company has been operating a one rig Haynesville/Bossier Horizontal ("H/B Hz") drilling program and has been able to maintain stable production with a 50% reduction in CAPEX.
Operational Update
The 30-day average for the Company's Verhalen "B" 1H H/B Hz well (5,270' lateral and 15 fracture treatment stages), which was completed in August and on the sales line September 1, 2009, was 5.7 million cubic feet of gas per day ("mmcfgd") while on a variable choke. The Company also completed the Holt 1H (formerly the K5 1H) H/B Hz well during the third quarter with a 4,900 foot lateral and 12 fracture treatment stages; averaging 5.7 mmcfgd for the first 30 days, on a variable choke.
We now have 7 long laterals that have produced from 30 days to 210 days. The well production plots are in line with corporate decline curves for estimated ultimate recoveries (EUR) of 5.4 - 6.5 Bcfe, per well; available on GMXR web site. In addition to its first nine completed H/B Hz wells, the Company has successfully drilled the Verhalen "C" 1H H/B Hz well and it is expected to be completed in October 2009. Drilling and completion well costs for the Verhalen "C" 1H are expected to be below $7 million, which will be the lowest cost H/B Hz the Company has completed to date. Current completed well costs are estimated to be $6.5 million, coupled with EURs in the 5.4 - 6.5 Bcfe and active hedging program can provide internal rates of return of 40%.
The Company and Kinder Morgan are continuing the due diligence process related to the previously announced pipeline transaction, expectations of closing soon.
GMXR is a 'Pure Play', E & P Company with one of the most leveraged Haynesville / Bossier Horizontal Shale Operations in East Texas. The Company has 465 Bcfe in proved reserves (YE2008); 94% of which are natural gas. The Company's proved reserves are 81% operated. Current production is derived from 9 gross / 9 net H/B producers, 324 gross / 186.9 net Cotton Valley Sand ("CVS") producers and 45 gross / 37.5 net Travis Peak / Hosston Sands & Pettit producers. The Company has identified 762 gross / 520 net H/B Hz 80 acre un-drilled locations and 2,657 gross / 1,974 net CVS 20 acre un-drilled locations. These multiple resource layers provide high probability and the potential for repeatable, organic growth.
The GMX Resources Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5158
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.
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: GMX Resources Inc.
CONTACT: GMX Resources Inc. Michael J. Rohleder, President 405.600.0711 x338 James A. Merrill, Chief Financial Officer 405.600.0711 x305
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