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You must be a Neal Boortz listener to know that fact... lol
IMO, if that Reno well report was some kind of new completion, there would have been a PR stating this 20 bo production rate. I think that the KS paper news release is pulling some old data from when the well was completed last April 2007.
I'll keep my fingers crossed that this is a new completion zone on this old mature lease and that the initial 20 bo doesn't decline too rapidly as would be expected on these mature leases.
I agree, good reminder though from spring 2007, lots of production potential from that lease with all the rework of the wells mentioned in the article. Too bad the flood (???) did a number on those projections....
So are you thinking this is a "new" unannounced well or is this just old info that finally made its way to that KS newspaper report? Every well would need an NOI so I think this is old "flushed in" data from last year (at the earliest). Could be wrong though, we'll see if a new Hemi PR comes out...
That could be an interesting event, do you know what night / time it is scheduled for???
Thanks zquy (and BigMur too for the PM)... That makes sense and hope you are both right for all us shareholders in deep with HMGP...
Thanks REAZO - again, you provide very good info that seems to be extremely honest in nature. GLTY, it seems that even with a good story developing on the production side, the financial (SP) side of this stock is just plain swimming upstream in this pinky land water...
I'd say you're probably right, I sure wish JN would resurface with a new AS figure... Seems his track record is pretty good over the 1 year I've been in the Hemi game...
I know several who said they were tracking those T trades and would love to see if the totals correspond with any AS increase over the last official Hemi PR share count.
Well that sounds reassuring... The end game of what happens to all these NSS was very puzzling to me. I have been doing many Google searches on NSS and although it is very real and does happen esp. in the pinks, I could not find any articles on how these shares get resolved in the end.
From what you're saying, any broker holding stock in street name is responsible for the stock cert's being real. If I go to sell my shares and they find out they were "air shares" then they buy an equal number at their expense on the open market to replace mine?
Doesn't the TA keep a tally of the authorized # of shares and a stockholders list of all shares held (in street name and actual paper cert's)? It would seem to me that the TA would know exactly how many shares of discrepancy there is at any one time.
REAZO - Are you suggesting that most of these 500k shares today were naked short sales then? If true, just how many of these "air shares" are in stockholders hands at the moment? Even if KAA's next PR states that exactly 58 million shares are authorized for free trading, just how many more millions are these NSS's? Is my long position real or NSS shares, are yours? Kind of scary to think that some / all of our purchases over the last 4-6 months were not even real shares.
Until this uncertainty gets cleared over this stock, it seems that the trend is down, down, down no matter what the new production results are...
My first buy in on HMGP was around 0.24 . At today's low, I will need a 6 bagger (600% SP gain) just to break even on that buy. I have never heard of a buyout where the acquiring company paid that much of a premium over the existing SP, it's usually 25 - 75% premium at least on larger market cap stocks. Anyone else know of an example of a nano-cap getting a significant buy out premium to the market price?
Status of Driskill - Did I miss something in one of the recent PR's or message board posts about what the plan is for Driskill? Originally the plan was to drill Collins, Weseloh and Driskill pretty much 3 in a row.
I am thinking that the extra cost of completing the Collins well has made the drilling of Driskill to be put on hold -or- more likely that the money would be better spent drilling an appraisal well on the Collins lease with that money because the potential there is better based on preliminary production results.
Can anyone give me the official answer or at least speculate if there is no official plan that has been PR'd. The link below of the NOI shows that the original spud date was to be 4/21/2008.
http://kcc.state.ks.us/conservation/intents/040908_Driskell_Hemi_1.pdf
TIA
that's a hoot - and, I bet 2/3 Obama supporters wouldn't even get it...
That's a reasonable synopsis - optimistic yet seeing all is not perfect... I guess that's how you got your handle there REAZO!! lol
I would also encourage Keith to provide some real leadership in the financial business end of the company. Things on the exploration side are proceeding slow and steady. The stock price could be more proactively addressed with some concrete steps announced by mgt. in my opinion. Each PR talks about how undervalued the company is and alludes to possible share price manipulation being behind it. Why can't something be done to confront this directly? What is the status of the long awaited flood insurance payment? Some put the settlement into the $1M range, my gosh that's almost 0.02 a share that would sure be nice to have back on the asset side of the ledger.
Understood - thanks for the explanation....
Just curious - why the need to pixelize those photo's of the Collins pump jack in the area between the casing head and the stuffing box? Since both photo's have that obscured area it must be deliberate.
It is reasonable to assume that the likes of Devon, EOG, Chesapeake or XTO would come to Hemi's doorsteps if Hemi holds a lease in a pooled area of the Barnett shale that they want to drill. It is correct legally that the operator would need to have 100% of the mineral rights holders under contract before they start to drill. That would get Hemi into some negotiations over that particular piece of land and perhaps Hemi could make some good financial gain and royalty's on the deal.
What is not reasonable is to think that a multi billion dollar NYSE listed O/G company of the likes mentioned above would want to buy out Hemi for their ND,TX,KS leases... That seems far fetched to me and is surprising it even comes up as a scenario at all.
If / when Hemi gets that end game buy out, it will likely be from a small cap / medium cap operator who wants to increase their interest in a particular geographic area. I see a separate deal in ND, a separate deal in KS, and so forth.
[edited voluntarily by bdahl385 from my earlier post]
If publicly traded, I assume that pinks would work the same way. If they fail, the bond, preferred stock or debt holders would have first claim to any assets of the company. If they were able to satisfy their debt (Very,very doubtful or they wouldn't have failed) then common stock holders could be in line for some of the assets. This would be so rare in the pink universe I think its safe to say that it would never happen.
When a publicly traded company fails, the common stock holders are always last on the pecking order when trying to pick up some of the company assets. Since the company probably failed due to poor financial shape, what little is left goes to the debt holders (bonds) and preferred stockholders first.
Similar to the fact the 2nd and 3rd lien holders on a home mortgage gets wiped out when the primary lien holder forecloses on the property. That's why those 2nd's and Home Equity loans always are more costly for the borrower than the primary mortgage... Higher risk, higher interest rates...
Better be a nimble trader for this or Fannie... An influential money mgr. I follow stated this past weekend that he feels both will go under at some point. Their bonds and preferred stocks will be made good on but the common stock holders will be left with zilch...
Mur - that was a good synopsis, but a little wordy...
I think you could just throw out a fishing analogy and simply say that Hemi is chumming for bigger fish and using their small parcel Tarrant Co. leases as the bait...
Now if only Hemi can "set the hook" when one of those big fish bites....
Kels - what's your informed (or best guess) as to how many actual acres of land Hemi has in this Barnett shale play? There has been posts on the board showing 6 court filed documents of Hemi leases but these looked to me like single family house sized lots. 6 leases times a typical residential lot size of 1/3 acre equals 2 acres total.
I am trying to establish a monetary value of the leases since we know the published terms of some of the gas players in this trend. Now we just need to know the acreage that Hemi holds.
Thoughts?
Even if the gas is sold at substantially below "normal" market rates, it would solve two problems. 1) It would keep that gas from being vented / flared which is a total monetary waste and environmental issue. 2) Selling the gas would allow the choke to be widened and allow the real treasure, the liquids (oil and condensate) to be produced up to the reservoir potential.
Then we'll see what this Collins well can produce on an extended basis.
Good info zguy - no doubt there are special procedures in place on this well to get the oil production flowing. The gas and associated condensate makes for a complicated completion in lieu of the fact there is not a local market at present for the NG. It is a shame to have to vent / flare that gas but it's the cost of doing business if we want to produce the liquids.
I don't mean to beat a dead horse with this lingering topic, I just want to express my reluctance to believe the original PR stating 2000-2500# of pressure in this zone. Below is a link to a pressure gradient chart that shows formation pressure versus depth. This includes normal hydrostatic, overpressure and lithostatic gradient lines. If we assume the Squirrel zone is around 900', normal virgin pressure would be around 500# - the same as KAA mentioned for a typical KS well at this depth.
http://www.glossary.oilfield.slb.com/Display.cfm?Term=formation%20pressure
This will be my last post on this topic, I will just wait for the final well results to play out and see if any further mention of formation pressures get released. Once they market the gas, it's normal for the production figures to list a volume (mcf) and flowing/shut in pressures. Time will tell...
BigMur - My main point of argument with you came over the discrepancy between the need for a pumpjack and the PR'd pressure of 2000-2500 #'s in this zone. Here was my original response:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=31403642
Plain and simple, if you have 2000# pressure in a 900' zone, you shouldn't need a pumpjack to lift the fluid, it would flow on its own. Since you have provided visual proof of the well being on a pumpjack, then it appears to me that the well doesn't have 2000# of pressure any more.
the other 17 is going where???
"Up in Smoke" - no wait, that's Cheech and Chongs line... Man - I'm dating myself with that one, lol...
Maybe they can use that wasted gas to power the pump jack motor that BigMur assures me is there even though the 7/31 PR stated "the well was flowing and didn't need pumping"... I've seen many of these "poppin johnny" NG powered motors out in remote TX where there wasn't any electrical lines in the area.
10,000 acres is a lot of room to drill - yes, but how many of these acres are direct offset to this new Collins well? How many are "virgin" leases versus "mature"? Kels corrected an earlier post of mine when I stated that the new Weseloh well was close by. It's really 5 miles away along with Driskill. It would sure help us shareholders, and potential shareholders, if Hemi were to put up lease holdings maps on their website. Of 9 different o/g stocks I own, including other pinks, this is the only stock that doesn't list lease map references on their website. Why???
I do apologize for getting the geography mixed up. I thought the Weseloh was close to the Collins but you corrected me to the fact it is closer to the Driskill. I do not post misinformation on purpose, sometimes I just have to go from memory.
That brings up a point though, if Hemi operated with more transparency, they would have a nice link on their website showing their lease maps and it would be easier to "connect the dots" with all these trends and drill sites being bantered about. I think it's crazy for you and BigMur to keep espousing us all to do the DD to find out for ourselves where everything is by doing a field trip to KS or keeping our own maps "up to date". It is nice that you have been able to go and I thank you for sharing the details with us all. It would be nicer if the need did not exist to have to do that.
Nice visual - I would say the "tanking" began at about 70 cents a share!! 70 cents to 4.5 cents shows about a 90% loss...
I know a little German - I'd say this was "uber tanking"
Realistically, although the Collins well has some real potential for good NG production rates, I think Hemi will be in a stronger position to negotiate a "gas contract" once they further prove up the field size and reserves through additional drilling. I don't think the initial production levels from this one well gives them enough data points to get a sales volume potential.
I wish the PR listed the volume of gas (and flowing pressures) rather than the $5k a day value. Standard terms for O/G industry list volumes (mcf or mmcf) and not dollars. What NG sales value did Hemi use when they estimated venting $5k a day?
The mentioned CBM potential is also a non factor until they actually do a production test on these zones to see what kind of flow they get.
You are correct, a 10 - 20 boepd well producing from a 900' zone is actually a helluva well if it sustains itself at that level. Now if the mix were more on the oil side and not NG, it would be immensely more profitable for the company given the lack of a local gas market at present.
Offset well(s) to be drilled will probably try and hit the zone a little lower to get more into the oil than the gas cap. Hitting a well high is not always the best thing if you cannot market the gas. Probably what Craig and Keith are deciding to find the sweet spot to drill the next offset well. Since they had the money set aside to drill Driskoll but it didn't happen, just need a NOI and a rig.
The reply was to Onco's question about the gas price. If it didn't enlighten you, that's okay with me... LOL
Others have posted that the one gas pipeline in the area pays way below market price for their gas take. It's kind of a monopoly thing I guess, the wells that produce gas are either shut in or sell at these low prices depending on the economic benefit to the company.
In almost all cases, the producer (read Hemi) is responsible for the cost of the gas infrastructure (well heads, pipeline, compressors, metering, etc). The gatherer (read pipeline company) allows them to tap into their pipe at variable prices on the put through of the produced gas.
Oil is a much less costly and simpler hydrocarbon to market in this area of KS.
Free Happy Hour is every Friday from 4-5 EST, unless something has changed in the last two weeks. I use if to PM since I have a freebie account. I didn't get to use it last Friday but it worked fine for me the Friday before that... GL BAU!
It's curious too that no mention of Weseloh in today's PR. It is just across the creek I believe from Collins and apparently isn't producing very good. Their last PR said they were going to try to recomplete the well to increase production. No word means to me no success. Today's PR makes it sound like they have discovered a very large new reservoir trend but it apparently doesn't even cross the creek.
As I had stated when the Collins PR first came out, all that gas is actually a mixed blessing. W/O a pipeline to sell into, the gas just gets in the way of the oil production. You have to vent / flare / or restrict the well's potential to deal with the gas. Also missing today was a follow up pressure reading. I will fall on the floor dead if it's anywhere near the PR'd 2000-2500 lb. pressure from a 900' zone.
Cowboy - good to see you and Plastipunk over here. Always enjoyed your straight shootin' style over at that other board. I swear if I see another post about how their drilling program is based on "Creekology" I'm gonna hurl....
Yikes! You've been holdin' for 2.5 years eh... Well I've been in Hemi 12 months now and am down 84% on my first purchase. I have dollar cost averaged down (something good investors should never do btw) to where I am now down only 55% on my average cost.
They say the trend is your friend, I guess that's true for Hemi if you were one of the shorter's...
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=31583750
My investment style is to try and grow my money I invest, not accumulate a larger and larger number of shares...
Thanks Mortgage1 - that seems like a very unbiased and factual account of things. Could not agree more.
DL2 - that point doesn't really concern me. There would / could be lots of reasons. With a 100 well project, they probably had all their equipment pre-ordered and ready when needed to install, the wells are shallower, 500-600' instead of 1300' as the Collins, they had 2 full time rigs running, the top surface locations could be on higher ground rather than next to a creek as Collins.