OKLAHOMA CITY, Aug. 29, 2011 (GLOBE NEWSWIRE) -- GMX RESOURCES INC., (NYSE:GMXR); today announces that the Company has completed the drilling of its first Three Forks horizontal well. The Wock 21-1-1H in Stark County, North Dakota reached total depth of 21,151' with a horizontal lateral length of 10,281', which included drilling a vertical pilot hole and performing additional testing. Oil shows were predominant in the vertical and horizontal lateral while drilling in the Three Forks formation. The Halliburton Rapid Frac™ sliding sleeve system has been installed with stimulation expected the week of September 26th. The Wock 21-1-1H well is scheduled for a 41-stage completion with oil production expected by October 1, 2011. The Company expects to spud its second Three Forks horizontal well, the Frank 34-4-1H, in Stark County, North Dakota on or about September 1, 2011. Permits are pending for the next two Bakken/Three Fork wells: the Evoniuk 21-2-1H in Billings County, a three forks horizontal well that is expected to spud in October 2011; and the Akovenko 24-34-1H, in McKenzie County, North Dakota, the company's first horizontal Bakken well that is scheduled to spud in November 2011. The company has twelve additional permits in process for wells located in Billings, McKenzie and Stark counties in North Dakota.
Non-Operated Well Participation
The company is a non-operator participant in two additional Bakken/Three Forks wells and one Niobrara well. The Taboo 1-25-36H operated by Slawson in McKenzie County, North Dakota, is scheduled to spud September 15, 2011, and the Marsh 21-16 TFH, operated by Whiting Petroleum in Stark County, North Dakota, is scheduled to spud approximately September 15, 2011. In the Niobrara, the Newton Ranches 34-3444H operated by Devon in Goshen County, Wyoming is scheduled to spud approximately September 19, 2011. The company expects to participate in an additional six wells permitted in the Bakken but not yet proposed and an additional six Niobrara wells that have been permitted but not yet proposed.
Seismic Analysis
The Company is analyzing the results from the Devon/ GMXR/ Chesapeake seismic shoot in N. Mustang/ Doty Hill area covering approximately 10,000 acres of the Company's approximately 40,000 net acre Niobrara position. The company expects to drill its first vertical Niobrara test well in the fourth quarter of 2011. The company anticipates that it will complete its final processing of N. Mustang/ Doty Hill data at the end of August and that this data will aid the Company in establishing well bore locations and orientations and targeting pay zones of planned future horizontal laterals.
An additional seismic shoot, led by GMXR, in the Chugwater area is being permitted and scheduled for completion by December 2011 that will cover the remaining approximately 30,000 net acres of the Company's Niobrara acreage. The Chugwater shoot has been expanded with the participation of additional operators and now covers 226 square miles. The majority of surface permits have been acquired and recording is expected to begin in late September 2011.
The Company has initiated a 3D seismic shoot "Crossroads" covering the core of our Harrison County position, and we expect to begin recording in mid September with processing to begin mid October 2011. The Crossroads shoot covering 33 square miles will assist the Company in identifying additional oil targets for shallow and deep reservoirs in the Glen Rose and Travis Peak and potentially below the Haynesville/ Bossier ("H/B") gas shale. Additional benefits include a more complete understanding of the joint and fracture systems of our horizontal development of the H/B and Cotton Valley Sands formations.
Liquidity Enhancement
The Company continues to focus on increasing its available liquidity. Previously mentioned steps include sales of non-core assets including rigs, GMXR natural gas hedges, compressors and excess pipe inventory, which are expected to contribute approximately $25 million in the third and fourth quarters of 2011. Other projects being reviewed include a "checkerboard sale" of up to 20,000 acres of its Niobrara acreage and the sale of some of its East Texas natural gas assets, which are expected to add an additional $100 million in liquidity. Additional projects are also underway that could further enhance liquidity for the Company in 2011.
GMXR is a resource play rich E&P company with development acreage in two oil shale resources in the Bakken (North Dakota / Montana) targeting the Bakken & Sanish-Three Forks and the DJ Basin (Wyoming) targeting the Niobrara Formation; both plays are 90% oil. Our natural gas resources are located in the East Texas Basin, in the Haynesville/Bossier gas shale and the Cotton Valley Sand Formation, where the majority of our acreage is contiguous and held by production. We believe these oil and natural gas resource plays provide a substantial inventory of operated, high probability, repeatable, organic growth opportunities. The Bakken properties contain nearly 600 undrilled, 9,500' lateral length locations, 43 potential operated 1280-acre units and 172 operated locations, with between 45% and 100% working interest. The Niobrara properties contain 584 undrilled, 4,000' lateral length locations, 94 potential operated 640-acre units and 376 operated locations, with an average working interest of 51%. The Haynesville/Bossier and the Cotton Valley Sand locations include 253 net Haynesville/Bossier horizontal locations, and 108 net Cotton Valley Sand horizontal locations. The Company believes multiple basins and both oil and natural gas resource choices provide us with flexibility to allocate capital to achieve the highest risk adjusted rate of return on our portfolio. Please visit www.gmxresources.com for more information on the Company.
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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 the completion of announced acquisitions, 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.