OKLAHOMA CITY, March 29, 2012 (GLOBE NEWSWIRE) -- GMX RESOURCES INC., (NYSE:GMXR), today announces that the Company has entered into agreements with two hedge providers to protect its cash flow on oil and natural gas production. The Company also announces today that the new build fit-for-purpose workover rig arrived in North Dakota and work has commenced on Company's wells.
Michael J. Rohleder, President said, "The $106.40 oil swap for 2012 and 2013 and three-way collar with downside protection starting at $100 for 2014 provides an initial tranche of cash flow protection for us at the high end of the current market range. Our natural gas swaps covering a significant portion of our estimated production also ensure a premium to today's market including a $0.08 Houston Ship Channel basis hedge. We plan to add additional hedge protection as new oil production comes on line and we will work to optimize these positions so the company receives the most favorable economics we can create through the use of these financial instruments."
Oil Hedges
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2012: April – December: $106.40 Swap for 38,565 bbls
July – December: $100/$90 Put Spread for 33,071 bbls
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2013: January – December: $106.40 Swap for 42,579 bbls
January – December: $100 Put for 26,654 bbls
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2014: January – December: $114.10/$100/$80 Three way for 35,529 bbls
January – December: $95/$75 Put Spread for 19,892 bbls
Natural Gas Hedges
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2012: April – December: $2.60 Swap for 4.0 Bcf
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2013: January – December: $3.50 Swap for 4.2 Bcf
- April 2012 – December 2013: $0.08 basis swap between NYMEX and Inside FERC's East Texas, Houston Ship Channel monthly index for 8.2 Bcf
GMXR is a resource play rich E&P company. Oil shale resources are located in the Williston Basin, North Dakota & Montana targeting the Bakken Petroleum System and in the DJ Basin, Wyoming targeting the Niobrara Petroleum System; both plays are estimated 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, with infrastructure in place and mostly 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 Company's multiple basin strategy provides flexibility to allocate capital to achieve the highest risk adjusted rate of return, with both oil and natural gas resources throughout our portfolio. Please visit www.gmxresources.com for more information on the Company.
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 risks relating to the Company's ability to obtain financing for its planned activities, commodity price risks, drilling and production risks, 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.