Highlights:
Overview of company: Market cap of around 14 million dollars. Purpose is to bring into production small oil and natural gas production.
How large is the property in Kansas: A shade over 1,000 acres. 100% working interest, 85 to 87% net revenue interest in the property.
Who currently is in the vacinity of the property: Chag is producing oil right now. Approximately 43 wells on the property. Several have been idle for a few years.
Seismic results: In the Kansas area there isn't much seismic information available. Primarily from the 43 wells. The field is becoming more of a "tour" now. Bill Stinson states they want to try and maximize the infill wells at the present time. There is the potential of a 3-D survey (process) but is that going to be cost beneficial? Perhaps it is best to just drill 3-4 wells rather than shoot the survey.
Size of wells: At least 3-4 reservoirs have associated gas. Their are 8 or 9 sizeable coal seams. Their is also associated methane gas. Their is a special piece of equipment lined up that will test each well. . .and from there decisions can be made on what kind of reserves CHAG has. Within the next year or two, Bill Stinson states they are confident the gas will outperform the oil.
What steps is CHAG taking to increase the number of wells? First load of oil is slated to go out tonight (according to Bill Stinson). The infill wells are slated to produce 150 to 200 barrels of oil per day. One of the things a lot of people haven't done in the area are to "comb" the production. Most of the wells have been "squirrel" type wells. Some arbuckles. The big bang for the buck according to Stinson will be on the "infill" wells. CHAG also plans on doing a water-fill for the squirrel horizons. The "shallow squirrel" horizons. Things are being looked at from a "cost/benefit" perspective. Infill wells . . .are coming next. Water-flood . . .s/p infill wells. And at the same time. . .the natural gas will be monitored. The initial infill will be slated to go to the "basement." Stinson states that "for a fact, there are 7 reservoirs that will produce both gas and oil." He also states that there are approximately 5 to 6 million barrels of oil. That doesn't even add in a lot of the lower reservoirs.
Capital concerns: Asraf: Remedial work is covered. First infill will is covered. The cashflow from the initial wells should produce revenues to keep the interest in the property moving forward. Stinson states they are confident they can produce the "arbuckle" on the property (to a deeper horizon). The arbuckle is projected to produce about 250 barrels per day. The squirrel formation is to produce about 75 barrels per day.
Gas supplies: Need to find out what they have first. . .then begin making the plans. After the drilling of 3 wells. . .the gas potential should be figured out.
Other properties: TX, KY. KY. . .nothing at the moment. TX. . .contingent on what happens in KS. This is a 3-6 month time horizon. Priority is to get something started "sooner" than "later." But it all comes down to timing (Shane Rodgers).
Goals: Increasing cashflow. . .until KS if fully developed and cashflow is optimal. Then, cashflow will roll into to the TX property. Other properties are also being considered (depending on cashflow).
Some have noted that revenues could exceed 58 million dollars (stated from the interviewer.
** Note, this is a "quick" summary of the information on the interview. Please listen to the interview to verify all information on the Internet. I'm just an investor trying to help others who may not have access to the media recorded.
Peace,
M&M Man
