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Future wells for KFG and potential rates website:
This is a great website I found where you can get upto date information on wells and their production rates. How does this help us with KFG? Well we can see what future production
rates are possible with new wells. For example Franklin:
http://www.drillingedge.com/mississippi
Go to that link and scroll down to find area. Click on Franklin and it will show all active wells and the producers. Denbury seems to be always close to us so lets use their rates and wells.
Divide barrels produced by number of wells and then by 30 days in a month:
14787(barrels / 7(wells) / 30(days) = Average of around 70bopd
Operator Production Month Oil Prod (BBLS) Gas Prod (MCF) Active Wells
Black Jack Oil Co., Inc. March 2014 3,096 301 19
Cypress Operating, Inc March 2014 1,876 0 1
Denbury Onshore, LLC March 2014 14,787 0 7
Durango Operating LLC March 2014 1,198 0 7
Fortenbery Operating Co Inc March 2014 124 68 1
George Tarver Operating Co. March 2014 128 11 1
Kepco Operating Inc March 2014 971 0 4
Nevanen Energy Inc March 2014 527 240 2
Palmer Petroleum Inc. March 2014 543 14 1
R. W. Tyson Producing Co Inc March 2014 921 0 2
Ram Petroleum LLC March 2014 804 0 1
Stroud Petroleum, Inc March 2014 8,736 0 3
Sundown Energy LP March 2014 934 0 10
Threshold Dev. Co. March 2014 816 0 5
Sorry this was a mistake. The Franklin well does still have to be drilled, but the other wells are inactive and need to be reclaimed which still has to be applied for.
KFG has 3 new approved wells to drill.
I went back to look at any other previous wells KFG has applied for. Shortly after the company got approval for the Parker and Craig wells, KFG also applied for 3 other wells and ALL have been approved. Pretty sure these will all be the next wells in line to drill after Craig 3 and Barnum 2.
Pike County I've never even seen or heard about, so that's a totally new well and area as I have no idea the lease size or potential. Fayette is KFG's top area where we retain a 75% interest in all those wells. Then Franklin is also a new area with a 10% interest which changes to 16.5% after payout.
http://www.ogb.state.ms.us/decisions/2014%20Final%20Decisions/20140219.Docket%20Decision.pdf
Page 6
PIKE COUNTY
Petition of KFG Petroleum Corporation requesting the Board to approve an extension of inactive well status under Statewide Rule 28 for the Emmerich No.1 Well.
ORDER NO.85-2014 -DECISION Approved Affidavit
FAYETTE FIELD - Jefferson County
Petition of KFG Petroleum Corporation, requesting the board to approve an extension of inactive well status under Statewide Rule 28 for certain wells in the field.
ORDER NO.94-2014 - DECISION Approved Affidavit
On Page 7 as of June 18th 2014:
262-2014-D BOOKER BRANCH FIELD - Franklin County.
Petition of KFG Petroleum Corporation, requesting the Board to integrate all
interests in a 40-acre oil unit, situated in Section 20, Township 7 North, Range 3
East, to drill the Seale No. 1 Well, to a depth of 4,500' test Wilcox Formation and all
other formations and pools that may be encountered at a regular location.
Approved
http://www.ogb.state.ms.us/decisions/2014%20Final%20Decisions/20140618.Docket%20Decisions.pdf
KFG Franklin well approval
I just found the Mississippi website that takes all well applications and either approves/denies them. Shows that KFG's first Franklin well has been approved and will likely be announced in the next update once the drill rig is in place. So expectto see that soon. On Page 7 as of June 18th 2014:
262-2014-D BOOKER BRANCH FIELD - Franklin County.
Petition of KFG Petroleum Corporation, requesting the Board to integrate all
interests in a 40-acre oil unit, situated in Section 20, Township 7 North, Range 3
East, to drill the Seale No. 1 Well, to a depth of 4,500' test Wilcox Formation and all
other formations and pools that may be encountered at a regular location.
Approved
http://www.ogb.state.ms.us/decisions/2014%20Final%20Decisions/20140618.Docket%20Decisions.pdf
Level 2
Orders/Shares Price Price Shares/Orders
1 / 80000 0.125 0.135 50500 / 1
2 / 23000 0.12 0.14 24500 / 1
1 / 20000 0.115 0.145 176000 / 4
1 / 48500 0.11 0.15 215000 / 4
1 / 20000 0.105 0.17 25000 / 1
1 / 10000 0.1 0.18 11000 / 1
1 / 10000 0.095 0.25 40000 / 1
1 / 20000 0.09 0.3 57000 / 2
1 / 4000 0.085 0.34 6000 / 1
3 / 54000 0.08 0.44 10000 / 1
KFG Level 2:
Level 2
Orders/Shares Price Price Shares/Orders
3 / 65000 0.115 0.145 29000 / 2
3 / 92500 0.11 0.15 201500 / 4
1 / 10000 0.105 0.17 1000 / 1
4 / 60000 0.1 0.18 11000 / 1
2 / 30000 0.095 0.24 10000 / 0
3 / 45000 0.09 0.25 40000 / 0
1 / 4000 0.085 0.3 12000 / 0
2 / 44000 0.08 0.34 6000 / 0
2 / 10000 0.075 0.5 30000 / 0
0 / 14000 0.07 -- -- / --
It's been a long time since someone has posted on this board. Back in 2008, KFG was just getting started on the Fayette field. Well 6 years later and a couple dozen wells later, KFG has made some amazing progress. The company is now running all operations on cash flow and has more than enough funding to keep going. Books are immaculate with no debt whatsoever and the company is able to do almost a dozen wells a year without any dilution. If Denbury was interested in us before, now I think they will want KFG for sure. All wells are broken down below and updates can be found on the KFG website. As per the most recent quarterly report and news releases:
50.6 million shares outstanding with around 10% insider holdings
June 12 2014 - Macneil 2 & 3 - 60 - 70bopd @ 21.5% = 13 - 15bopd
June 12 2014 - Parker 1,2,3,4 - 130bopd @ 10% = 13bopd
June 12 2014 - Craig 1 & 2 - 120bopd @ 21.5% = 26bopd
April 1 2014(MD&A) - 9 Fayette wells - 120 - 130bopd @ 75% = 90 - 98bopd
April 1 2014(MD&A) - Dale well - Put back on end of Q3, production unknown
April 1 2014(website) - Roundtree - 15bopd @ 12.5% = 2bopd (29% at payout 2015)
April 1 2014(website) - Miller 1 - 15bopd @ 4% = 1bopd(18% at payout)
Wells Being worked on:
Hannah - Still to be completed
Parker 5 - Needs to be cased, could be re-worked like parker 2
Mantua - New area, going to be drilled soon
Craig 3 - Going to be drilled soon
Franklin - To be announced and drill soon
For this calculation I am taking the low ranges on the production numbers and cannot include the Dale lease well because we won't know production from that site until Q4 results are released end of August. Either way, lots of production from 20 wells which will increase our reserves quite a bit. Information can be found in the Q3 MD&A and 2014 news releases.
Macneil(13) + Parker(13) + Craig(26) + Fayette(90) + Roundtree(2) + Miller(1) = 145bopd(low end)
145bopd X $100 barrel(brent pricing) X 90 days = $1,305,000 a quarter in revenue. This is the revenue using the lowest production numbers, lower oil prices, and not considering the CDN/US currency exchange. Then to top it off, KFG is the operator of these wells since one of the directors owns a drill rig and we get between $120,000 - $150,000 in revenue per quarter from management fees.
Calculated Quarterly revenue - $1.4 to 1.5 million going forward.
Net profit margins from past quarters vary, but prior to Q3 and the accrued income KFG didn't count, they earned $242,000 net in Q1/Q2 on $1.35 million revenue.
I also believe that KFG will have more than double their reserves from last year (122,500Mbbl) which was worth $6,125,000 based on $50 a barrel in value from their 51-101 report.
KFG Resources Prepares for Seismic to Redevelop Salt Dome
By Doug Hadfield
In Mississippi, just a few kilometres from the town of Natchez, KFG Resources (TSX.V: KFG) is about to try something that CEO Bob Kadane believes will create significant value for his company’s shareholders.
Buried beneath the Fayette field is the Fayette salt dome – the last hydrocarbon-bearing salt dome of its kind in the region that has not been redeveloped. In February 2008, KFG will carry out the first 3D seismic imaging survey on the Fayette salt dome in which it holds a 100% working interest. The data from the seismic survey will be analysed with existing data from more than 100 well logs to determine the best fifteen or more targets for a drill program to be started this summer. The goal will be to drill through multiple oil and gas formations in the shallow Wilcox Formation (from 3,500 to 3,900) and the Lower Tuscaloosa (9,600 feet).
Salt domes like the Fayette were deposited millions of years ago when the shores of the Gulf of Mexico were located far inland from their current position. As waters evaporated, they left thick pockets of salt in layers. Over the millennia, these were buried by sand, soil and sediment. Over time, the thick layers of salt bowed in the centre and penetrated upward through the existing strata of rock – hence the “dome” shape of the structures. The salt is hard and impenetrable; the upward bending of the salt formed traps or pockets where oil and gas collected, often in large quantities.
There are numerous salt features located in the area surrounding Natchez. While most have been thoroughly explored and exploited from the 1930s until the present, the Fayette Salt Dome has seen only limited exploration.
Of the 4,000 acres that comprise the Fayette field and salt dome, only a fraction has been explored. Historically, exploration companies have drilled 29 deep holes on the east side of the dome. The west side, however, has only seen eight deep drill holes – which makes the west side a priority target.
The problem with mapping on the west side of the dome, Kadane says, “has been that the drill holes are too far apart to make any logical conclusions from the surface mapping (well logs). Some of them had small quantities of oil and gas production, so they could be the edge of a larger untapped reservoir. These old wells are 1,000 to 2,000 feet apart and you could have a reservoir easily run right between them and not even know it. And that’s what the seismic will tell us.”
3-D seismic surveys, or "seismics" as they are commonly called, use sound waves to locate rock formations in the earth that are associated with oil and gas. Acoustic vibrations are created either by a controlled explosion, or more often, by use of a vibration truck, which thumps the ground creating waves that radiate into the earth. The sound waves are reflected off subterranean rock, sediment, salt and other layers. The length of time required for the waves to travel through layers of varying densities is used to create a profile of the structure. With the use of computers, 3-D seismics have becomes incredibly detailed and complex. Billions of data points are compiled to create a three dimensional image of the underground structures thus dramatically reducing the element of chance in drilling wells.
Then there are the well logs from more than fifty previously drilled wells in the Fayette field. These well logs are like electric cardiogram images depicting a foot by foot image of the types of hydrocarbons present down a well hole. With the log data, the presence of hydrocarbons is measured up and down the drill hole and outward about 20 feet in all directions.
In addition, Kadane says, 3D seismic survey signatures will show areas of undepleted shallow gas as well as the undepleted oil reserves. In all, this adds up to a potentially huge amount of hydrocarbons.
Although KFG’s earlier plans to recomplete its existing three Lower Tuscaloosa gas condensate wells were successful, they represented only the initial phase of hydrocarbon recovery from the Fayette field. With those online, the Fayette Field is presently producing 20 barrels of oil and 250 MCF of gas per day. Kadane says these were just a fraction of what could be underground here.
“If I walk away from this with just five successful wells, I’m going to be disappointed, Kadane says.”
He points out that every other similar salt feature in the Gulf Region that has seen 3D seismic survey data used in conjunction with down-hole well log data has been successful in finding new oil and gas reservoirs in just about every producing horizon.
The Fayette field is structurally similar to oil company Denbury’s (NYSE: DNR) numerous projects in Louisiana and Mississippi, including other salt domes that Denbury has drilled for primary recovery or pumped CO2 into for secondary recovery. Denbury is one of the largest oil and natural gas operator in Mississippi and owns the largest reserves of CO2 used for secondary oil recovery east of the Mississippi River. In recent years, Denbury has systematically acquired many of the known salt formations throughout Mississippi and Louisiana.
“These old producing fields with salt features have been redeveloped by Denbury and others by doing exactly what we’re doing – 3D seismics and well logs – and then redrilling the areas and finding new reservoir traps, new fault traps, deeper beds, shallower beds. The reason there are still untapped resources down there is that using well logs alone didn’t give enough indication for the zones to be successfully tested for hydrocarbons.”
Historically, more than two million barrels of oil and 8 billion cubic feet of gas were produced from the Lower Tuscaloosa formation at Fayette. Kadane emphasises that most of the historical production was from the east side of the Fayette salt dome, which has seen most of the drilling.
“There no reason I can think of why the same or similar won’t be possible to find on the west side, where only eight holes have been drilled,” he points out.
While KFG focuses on drilling the untapped side of the salt dome, there remains another value-opportunity to consider as well. The Denbury model of secondary recovery using CO2 requires substantial capital to initiate, but is a very profitable model for that company. Kadane says the secondary model is one he is considering – once the company has the seismic data.
“It has been every economic for companies like Denbury to revisit these older depleted reservoirs throughout Louisiana and Mississippi,” Kadane says. “Another object of the 3D then is to figure out exactly where the old depleted reservoirs are so you’ll know where to put your injection wells for a secondary recovery project.
“We’ve already been approached by Denbury to sell Fayette and we would have done a JV, but I wasn’t about to sell it. They’ve done their homework – they know what’s there.”
KFG Resources has 42,147,311 net shares outstanding and presently trades at $0.09 per share.
This article is intended for information purposes only, and is not a recommendation to buy or sell the equities of any company mentioned herein. It is based on sources believed to be reliable, but no warranty as to accuracy is expressed or implied. The opinions expressed in the article are those of the author except where statements are attributed to individuals other than the author, in which case the opinions are those of the individual to whom they are attributed.
6550 ft Wilcox Formation Oil Test May Spell Success
for KFG Resources
By Leia Michelle Toovey
KFG Resources (TSX.V: KFG) announced on Oct 26th that its subsidiary KFG Petroleum will participate in the drilling of 6,550 ft oil test in the Wilcox Formation in Adams County, Mississippi. If this well is successful, the company will retain a 15.375% working interest and an 11.5% net revenue interest in the well and surrounding acreage.
The Wilcox Formation is a known reservoir rock throughout much of the Gulf Coastal Plain, extending parallel to the coastline into southern Texas. The Formation is comprised of sandstone, which was deposited in the ancestral Gulf of Mexico during the Eocene when the shoreline was much further inland.
KFG has remapped all nine zones of the Fayette field. Remapping work revealed several zones with development potential in the shallow Wilcox gas formations. This survey also brought to attention the fact that the west side of the salt dome is virtually untouched.
In 2006, KFG Resources increased its interest in the Fayette field to 49.2%, (42% net) in three leases covering 3,200 acres of the field.
The Fayette field is located on a salt dome. Simply put, a salt dome oil reserve is formed when a cylindrical shape of salt intrudes through the lithosphere distorting and buckling the earth’s crust in its path.
KFG CEO Bob Kadane likened salt dome formations to throwing a rock onto a pane of safety glass, such as a windshield. Concentric rings form around the point of impact. This is exactly the stress response from an intruding salt dome. Concentric rings form as layers of rock buckle and bend due to the forces caused by the up-thrusting salt. When permeable rock becomes capped by impermeable rock, an ideal oil and gas reservoir is formed. And due to the symmetrical nature of the feature, if one side of the dome contains oil, there is a high probability of striking oil on the other side.
“The Fayette field has produced 7 million barrels of oil to date, primarily from the east side,” according to Kadane. “The remaining potential of the field is huge.”
With sub-surface mapping information in hand, KFG resources entered into an agreement with Union Securities LTD of Toronto, Ontario, to act as an agent for a private placement. The initial announcement of an offering was on March 26, 2007. Shortly after the announcement, Kadane decided to delay the offering based on unfavorable market conditions.
Union Securities went forward in September with an offer to sell 20 million units at $0.10 per offering. On October 12, with the completion of the first tranche, 18,055,000 units were sold. On October 22, the second tranche was completed. KFG had achieved its goal of raising CDN$2.5 million.
The capital raised was for the company to have a 3-D seismic survey completed in the Fayette field. This survey was started at the end of October 2007, and will be completed in February 2008. The results of the survey will determine the ideal location for drilling the oil test. The secondary goal of the survey is to determine which wells in the Lower Tuscaloosa would benefit from CO2 injection secondary reclamation.
The Lower Tuscaloosa has produced 2,200,000 barrels of oil. Production history indicates that CO2 injection will recover 80% of primary production volume. Injection, therefore, should recover an additional 1,700,000 barrels of oil; this is in addition to new production that will come from the west flank.
In 2007, KFG Resources’ annual revenue from the sale of oil and gas was $550,328, compared to $760,229 in 2006. The slow down is due to a decrease in the average price of natural gas and oil, as well as the decline in oil production.
At the end of the 2007 fiscal year, the company’s primary producing wells
were located on: the Dale Lease, Concordia; Parish, Louisiana; the Board of Education Wells, Franklin Country Mississippi; and the Weyerhauser Wells, Forrest County, Mississippi. The five wells in these regions comprised the bulk of the company’s proven oil reserves. In addition, the company had three wells in the Fayette Field, Jefferson County, Mississippi.
Kadane and his team have been steadily working toward improving their odds. With an eye toward growth and increased shareholder value, the company is poised for success. The company has acquired a major interest in an untapped resource that appears to have excellent potential. The reclamation project in an area of proven production has a high likelihood of near term payoff, too. The recent attraction of CDN $2.5 million in a private placement will power the team at least to the completion of a thorough technical survey. Add to this oil prices at record highs and KFG Resources is certainly one to watch this month.
This article is intended for information purposes only, and is not a recommendation to buy or sell the equities of any company mentioned herein. It is based on sources believed to be reliable, but no warranty as to accuracy is expressed or implied. The opinions expressed in the article are those of the author except where statements are attributed to individuals other than the author, in which case the opinions are those of the individual to whom they are attributed.
KFG Resources Prepares Seismic in the Hunt for 4 Million Barrels of Oil and Gas Equivalents
By Katherine Young
After more than two years of painstakingly raising funds for a crucial seismic survey, KFG Resources’ (TSX.V:KFG) story is about to heat up. With a $2.5 million financing in place, and permitting currently underway, KFG has contracted to begin a 3-D seismic survey on its Fayette Oil Field in the Mississippi Interior Salt Basin in February 2008.
Financing will cover the seismic survey on the Fayette Oil Field, located in Jefferson County Mississippi, as well as the planned next stage—a 10,000-foot test well to be drilled in late spring of 2008. Production and cash flow could follow as soon as ten months from now.
The objective of the 3-D survey is to survey the Lower Tuscaloosan reservoir at approximately 9,500 to 10,000 feet deep where 37 deep wells have been drilled so far, 29 of which are on the east side and only eight on the west side of the salt dome. Current production from the dome – which totaled 31 barrels of oil per day and $290,085 cash flow for KFG at year end in April 2007 – has all been from the southeast side of the dome. Of secondary importance, the survey will cover several areas KFG has identified with development potential in the Wilcox shallow gas targets.
Salt domes form in marine basins like the Mississippi Interior Salt Basin when salt intrudes into the surrounding rock strata following repeated flooding and draining of the basin. Sediment forms over the salt, burying it. Then, because the salt is less dense than the sediment, it pushes up toward the surface forming a dome. As the salt forces its way to the surface, the surrounding rock bends, forming pockets, or ‘traps’ where oil and gas collects.
The trap around the salt dome is circular, much like when a drop of water falls into a pool and ripples travel outwards in concentric circles. When there is known oil on the east side of the dome, as in this case, there should be oil on the west as well, where KFG expects to find reserves comparable to those already discovered on the east.
The seismic survey will pinpoint exactly where the narrow traps lay, drastically improving accuracy of drilling over previous geology-only technology.
Robert Kadane, President of KFG, says, “These are very narrow channels – 1,000, maybe 1,500 feet wide – and could be about 100 feet thick. It’s very easy to miss, so that’s the reason for the survey. What we’ll do is see where we have half a dozen of these signatures line up on top of each other and that’s where we’ll drill. It’s that simple.”
KFG’s target is 2 million barrels of Lower Tuscaloosa oil, 10 billion cubic feet of shallow gas reserves, and approximately 8 to10 billion cubic feet of deep gas reserves. In addition, secondary reserves, which can be recovered through CO2 injection, account for an additional 80%. Numbers like these inspire Kadane to comment, “If it works, the shareholder value will be increased somewhere in the magnitude of 10 to 20 times.”
With KFG carrying up to 80% of a potential 4 million barrels of oil at today’s price of nearly $90/barrel, the Fayette Oil Field holds a promising risk-reward ratio.
Adding further value to the project is the 50 years of experience Bob Kadane has put in – much of it here in the Mississippi-Louisiana Salt Basin. Since he was digging ditches at 16 years old has worked in virtually every aspect of oil exploration—from finding and developing reserves to selling oil and gas.
Words of wisdom gained from a lifetime as an oilman: “Dance with the girl you brought to the party,” Kadane chuckles. “Stay with what you’ve been successful at. The easiest way to fail is to get involved in a new area you don’t know anything about. I’ve had consistent success throughout the years here so that’s where I’m staying.”
And with pipeline infrastructure in place, low Mississippi taxes and 2.2 million barrels of oil produced so far from the southeast side of the salt dome, Kadane’s focus on the Fayette Field seems well-placed.
This article is intended for information purposes only, and is not a recommendation to buy or sell the equities of any company mentioned herein. It is based on sources believed to be reliable, but no warranty as to accuracy is expressed or implied. The opinions expressed in the article are those of the author except where statements are attributed to individuals other than the author, in which case the opinions are those of the individual to whom they are attributed.
KFG Resources Expands its Oil Horizons in the Mississippi Interior Salt Basin
By Christina de Wit
November 19, 2007
Voltaire, the great French Rationalist philosopher, described business as “the salt of life”. Perhaps he may have got it backwards – as far as KFG Resources’ (TSX.V:KFG) management is concerned, “salt is the life of business”. It intends to test this theory as the company prepares to launch a 3-D seismic survey in its quest for oil on its Fayette Field property in the Mississippi Interior Salt Basin.
The Fayette Field is located in Jefferson County, just north of Natchez, Mississippi, and is presently producing 20 barrels of oil and 250 MCF (thousand cubic feet) of gas per day. There are currently ten producing horizons in the field, and management believes that there are between five and ten more viable horizons. It’s worth noting that the company’s property, which consists of a 49.2% (42% net) interest in three leases covering 3200 acres on the largest salt feature left to be redeveloped in the region.
Permitting for the survey has already started and the 3D seismic survey will be conducted in February 2008. A 10,000 ft test well will likely follow in the second quarter of 2008. Drilling in this relatively under-explored area has two major possibilities: one, the highly productive Eocene Wilcox Formation, and the much deeper Lower Cretaceous Lower Tuscaloosa – also a famous oil reservoir. Within the Wilcox Formation, recovery rates are as high as 40% in this water drive reservoir. Secondary recovery using CO2 in the deeper Lower Tuscaloosa have yield an additional 80% of primary production.
The advantage of 3D seismic surveying is that it’s a two-pronged strategy: The survey will delineate both shallow and deep reserves. It will also paint a picture of the secondary aspect of the reserves, which are important in determining added value in terms of what can be extracted via CO2 injection methods once the primary reserves have been tapped.
Salt domes are often the site of salt mines and oil wells. They can range from 1 to 10 km across and have been known to reach depths of up to 6.5 km. They are formed when large plugs of salt from deep in the earth are forced up, pushing up layers as they rise. As the density of salt is generally less than that of its surrounding material, it has a tendency to move upward toward the surface, forming large mushroom-shaped domes. As the salt moves up, it can penetrate and/or bend strata of existing rock with it, causing them to bend slightly upwards at the point of contact with the dome. This process often forms pockets where petroleum and natural gas can collect between impermeable strata of rock and salt. These formations are a major source of the petroleum produced along the coast of the Gulf of Mexico.
The economic potential of salt domes has been known about for some time, however, recent drilling (encouraged by both high oil prices and technological advances) of salt dome flanks in the Mississippi salt basin has resulted in important new discoveries.
37 deep wells of 10,000 feet or less have been drilled in the field– 29 of them on the east side of the dome. The east side of the dome has produced 2.2 million barrels of oil so far. This certainly gives cause for some optimism– since salt domes are usually symmetrical in nature, oil and gas deposits on one side tend to be mirrored on the other. The company’s 3D survey will focus on the west side of the dome. “I’m hoping to develop new production on the west side [of the dome], and to enhance the overall value of the project,” said the company’s CEO, Robert Kadane.
Investors would be hard-pressed to find a total package like this one, especially given recent record oil prices. Several factors highlight KFG’s potential for major appreciation: management is well prepared– all titles have been cleared, and the company is completely debt-free. Mississippi is an excellent place to work in– as costs and taxes are very low. Fayette Field, being inland, is sheltered from the notorious hurricanes that affect the Gulf Coat. Required infrastructure, such as salt water waste removal equipment and gas pipelines, is in place to support increased production. On the finance side, the company has recently closed the second tranche of its brokered private placement through Union Securities. The company is building on its existing success within the Fayette Field and within it other properties in Louisiana, Mississippi, and Kansas.
An oil play of this size offers investors maximum flexibility, mitigated risk, and the potential for handsome returns in a very short turnaround period– serious production and cash flow could take as little as ten months.
Mr. Kadane is a third-generation Texas oilman with over 40 years’ experience in the business. When asked why he has spent much of his life exploring in the Mississippi-Louisiana Salt Basin, his words of wisdom to investors were short – and sweet: “I’ve been here because it’s been successful for me in the past.”
This article is intended for information purposes only, and is not a recommendation to buy or sell the equities of any company mentioned herein. It is based on sources believed to be reliable, but no warranty as to accuracy is expressed or implied. The opinions expressed in the article are those of the author except where statements are attributed to individuals other than the author, in which case the opinions are those of the individual to whom they are attributed.
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KFG Financial Comparison Chart (Audited Annual Financials From 2008 to 2015)
(Expressed in US Dollars)
KFG Year End Results in 2008
- Cash: $2.66M, Total Assets: $2.96M, Total Debt: $553K
- Revenue: $798K, Net Loss For The Year: -$64K
- Shares Outstanding: 30,874,646
- This was before the global crisis. KFG was trading around $0.15c and still raising money. Total was 25 million shares which is half of the entire O/S right now and a major cash injection. However this was done at a lower price.
KFG Year End Results in 2009
- Cash:$1.62M, Total Assets: $2.33M, Total Debt: $156K
- Revenue: $645K, Net Loss For The Year: $456K
- Shares Outstanding: 42,147,311
- Additional Funds Raised
KFG Year End Results in 2010
- Cash: $304K, Total Assets: $1.84M, Total Debt: $640K
- Revenue: $997K, Net Loss For The Year: -$1.4M
- Shares Outstanding: 47,786,580
- Additional Funds Raised
KFG Year End Results in 2011
- Cash: $1.03M, Total Assets: $2.94M, Total Debt: $834K
- Revenue: $2.9M, Net Income For The Year: $832K
- Shares Outstanding: 50,480,644
- This was a milestone year because KFG hit a string of wells(Fayette) that helped them recover from the financial crisis. Some assets were also sold and funds raised as well. The stock went back to the teen price range this year.
- Additional Funds Raised.
KFG Year End Results in 2012
- Cash: $637K, Total Assets: $2.43M, Total Debt: $439K
- Revenue: $3.5M, Net Loss For The Year: $144K
- Shares Outstanding: 50,559,191
- Despite the record profit, KFG took a major risk this year and unfortunately lost. Drilling a 100% interest Tuscaloosa well which cost the company over $1 million USD and it did not work out. This is why KFG’s strategy changed from solo wells to JV wells in multiple areas.
KFG Year End Results in 2013
- Cash: 861K, Total Assets: $2.5M, Total Debt: $430K
- Revenue: $3.05M, Net Income For The Year: $76K
- Shares Outstanding: 50,584,144(Some shares cancelled and this is the current share structure.
- This was the year where KFG started to diversify into multiple wells rather than just rely on the 9 Fayette and do a couple 100% interest wells.
KFG Year end Results in 2014
- Cash: $1.21M, Total Assets: $3.02M, Total Debt: $880K
- Revenue: $2.7M, Net Income For The Year: $67K
- Shares Outstanding: 50,584,144
- The reason why revenue went down this quarter was due to the fact that the 9 Fayette wells paid out from 75% to 59%, along with additional costs from doing other wells. However, new production was put in place to replace the lost paid out production from Fayette.
- Debt increase is based strictly on deposits from partners, not bank or payables.
KFG Results after 9 months in 2015
- Cash: $2.134M, Total Assets: $3.7M, Tot Debt: $1.07M
- Revenue: $2.27M, Net Income After 9 Months: $493K
- Shares Outstanding: 50,584,144
- If the price of oil didn’t drop 60% and weather didn’t hamper KFG’s operations (as stated in their last news release), net income would be close to $1 million USD right now. Regardless, this has not stopped KFG’s growth plans. Five to seven wells have been announced for the summer drill campaign and the company can only go forward from here.
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