Look at Hemi's proven reserves of OIL $100mil+
I'll also talk about probable but the proven is what many like to look at.
I posted the below a while back so some of it is outdated (example, I mention oil being $55 a barrel but I believe it is now over $62) but I thought after today, this would be a nice reminder :)
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"Read between the lines" of what Hemi has in store...
Some new investors and even long timers may not have yet connected the dots for what Hemi is doing in Woodson County Kansas (which is just one of many areas where Hemi has acquired land).
There are some important things to realize when connecting the dots... First, the oil under the 5 leases in Woodson County for which we have a reserves report has blanket formations. Blanket formations extend laterally over large areas. Meaning, what is under the ground right here is likely the same way over there. Second, many of the leases Hemi has been acquiring in Kansas are contiguous to the 5 leases mentioned above (meaning they are touching or next to them).
Knowing the above, we can "look ahead" so to speak.
The 5 leases above make up ~2000 acres. This is 3.125 sq miles. Hemi now controls 11 sq miles in this blanket formation and should have finalized the paperwork for 17 square miles by the end of June (see PR). Keith has mentioned wanting to go for 40 square miles but let's just stick with the 17 square miles for now. 17 square miles is 5.44 times more than the land we have the reserves report for. It has already been stated in press releases that Hemi believes, based on numerous records, cores, past history, etc. that the land around the 3.125 sq miles the 5 leases make up will have similar reserves. Also to note... the reserves report does not even contain all existing pay zones (even more potential reserves... see below).
So, lets do a little math. The current INDEPENDENT reserves report has proven reserves of 2.15 million BOE and probable of 5.1 million BOE for a total of potentially 7.25 million BOE.
If you talk only about the proven reserves and take 2.15 million BOE and multiply it by 5.44 (remember, blanket formations and contiguous leases... Keith acquiring contiguous leases is no accident) it is my opinion we will likely see at least 11.7 million BOE proven in the not too distant future. Oil is going for around $55 barrel in Kansas so at that price, it is not unlikely that we could have more than $643,500,000 in proven reserves once we start drilling these other leases. Now, throw in the probable and you are looking at the potential for over TWO BILLION DOLLARS worth of oil and just in Woodson County! This doesn't include Montgomery or even all the other states... and you wonder why so many people think this is undervalued? The above also doesn't include the block of leases Hemi just acquired with all the gas (above is just oil!).
Now, just let me hit you over the head with a 2x4... the reserves report doesn't contain the deeper zone, the Mississippian. It contains the other 4 shallower pay zones but not this deeper zone. Hemi has not yet drilled to that zone. BUT, production of oil and gas does exist from the Mississippian within a few miles all around and in all 4 directions of our contiguous Woodson County leases. What's it mean when others all around you are producing gas and oil from this zone on all your sides? Means you don't need to think too hard about good production coming from the Mississippian on Hemi's contiguous leases as well. AND, once this happens, it will be added to the reserves report making it that much more impressive.
Bottom line, Hemi is sitting on a ton of gas and oil with a ludicrously low market cap. Congrats to those who have done their DD and can extrapolate the above as well. Granted, the above is extrapolation... but not unreasonable extrapolation. For those who want to wait until Hemi actually proves up this land, don't expect to pay anywhere near these prices once this happens. Read the press releases closely, do your DD, and you can see that Keith and crew are building something that is going to be very big and I, for one, am very excited to be a part of it.
