I will title this round-up provided below as:
Hemi Definitive Report Part II"
Which is traced directly straight back to the CEO of Hemi, Keith Anderson, based on my and another Hemi Shareholders 01/23/09 visit.
I am also very glad to see that you too now agree with our main focus and approach of this Ihub Hemi board.
However, a recommendation before I deliver the following findings, again we all know the chart of Hemi. There are only so many ways to view and read this chart.
So please going forward try and be a bit more open to the Hemi business strategy and going forward actions of Hemi.
Because IMO that is why many are Hemi shareholders; to understand and position themselves for Hemi of tomorrow based on the current and prior action actions of Hemi today.
It has been 1 month since my meeting with Keith.
My first reaction was not to post the findings of my visit on the IHUB general board, but after such a recent bold statement now being indicated by you about "promoters continue to make posters the issue" as well as another alluding statement by another participant regarding a "Hemi Definitive Report" that is no where to be found; you have hit a very good point.......
The issue is about Hemi Energy and the below recap is about as direct as I can get to make the issue about Hemi.
As a Hemi shareholder I had great time really enjoyed the opportunity to get some time to meet Keith and spend sometime on his playing field getting another chance to discuss the Hemi operation and business strategy first hand
Just for the record so no onegoes off on another tangent...........
No promotion Fees or promises were made just some straight down to earth Hemi discussion between (2) Hemi shareholders and Hemi Managment.
Kels
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Hemi Definitive Report Part II
Hemi 01/23/09
Visit w/ Keith and another Hemi shareholder:
Note: All statements below are based on my direct discussion during my 01/23/09 visit Hemi Management and are my view and opinions based on such discussion.
> Horizontal drilling application for Silvey lease site approved by the KCC 01/22/09. Hemi Managment still deciding based on energy market, economic condition and weather factors when to start. Expectations based on data and records is that the Silvey Hemi-1 is located in a good area of Woodson County which is supported by the topography of the area (Creekology) and producing lease sites of the area.
> Current position within the O&G industry is that Cash is King; opportunities will develop based on current market conditions lease land deals or acquisitions thus preservation of capital is critical.
Flip side, contractors are hungry for work in this current environment and are cutting costs and providing easy/ quick start time commitments.
> The question? Which side to you play? As a shareholder of Hemi, my recommendation is get the horizontal done now, low expense/cost relative to a strong market and demand AND it gets production and revenue up for Hemi relative to Hemi’s current verticals wells if the horizontal well project delivers. Let alone other benefits of a successful drill such as a complete execution and the ability to move on to fully develope and complete the Silvey lease site as planned. IMO a greater risk for is to Hemi sit back and currently remain dormant.
> Current estimated cost of an SEK horizontal drill project is ~2-4x of a vertical drill depending on specific factors. Although a much better negotiating and leveraging environment currently exists today than when the oil market support $100+ oil.
> Rig-6 Bud will be the contractor for the vertical portion, then a driller that specilizes in horizontal gets involved. This horizontal drill has been identified and is on stand by.
> KAA explain once the vertical portion is complete and set. There are options at this point, continue or hold at this point, what and how the horizontal contractor does to break (Explosives in needed) the point for the horizontal well to begin from the end of the vertical drill.
> KAA confirmed the Silvey horizontal drill will be in the squirrel region of the formation and will run 2000’. He keep comparing to how many vertical wells does one need to equal this, and if a vertical well is delivering 1-5BBL per day in this region, then you do the math.
> Possible plan for the SEK Silvey site, if first horizontal drill produces then stage 2 work off of stage 1, then stage 3 off of stage 2, stage 4 off of stage 3, much like a perimeter that makes up a box, then down the middle of the box use injection well process (EOR techniques) to push the oil to the boundaries or these perimeters as an example of the benefit that a horizontal drill can provide versus traditional vertical drills
> KAA provided an excellent overall insight and analysis using a Woodson County map , the creeks and the current lay out of both gas and oils wells along with the Hemi data and record collection to justify the all current Hemi lease sites, wells and the business reason for the Silvey Hemi-1 lease site
> If this horizontal project delivers, there will be more Hemi SEK horizontal drilling projects
> Noted the creek locations within Woodson County, Owl creek and tieing into the discussion the role of creekology and the influence of creek formation to oil pooling and reserves. In addition noted the same for the Hemi lease site locations of Reno, Tebbins, and Purcell.
> Hemi has been storing / tanking oil , has a current capacity to store up to 2000 BBL, can add more storage tanks to premise locations if needed to increase storage capacity. Has currently been marketing what is needed to cover day to day expenses for the Hemi operation.
Current production is average 1-5 BBLs per day per active well. Hemi back to pre flood levels of well activity. Hemi monthly production is greater now than reported in PR Jan 2008 production PR data.
> Collins Big Gas well, almost blew out again, this happen before with prior driller, left Collins landowner holding the bag. again this only builds the case for the amount of gas that Hemi has behind pipe and in reserve.
> Current market environment for gas is equally soft, in pricing. Star controls the main pipeline and for Hemi to tie into the pipeline, high traditional expense after all costs and permission agreement provided. Hemi would need a current 5 mile line built for connection, pipeline just over the Woodson/Allen county line, Allen side
> Buy out plans based on gas proven reserves still an option and objective, but Hemi as part of the business strategy continues to develop plan B & plan C as it adapts to the current business and economic environment . The point by KAA, is that Hemi will develop these options that involve getting as much oil revenue up and running from the SEK leases and back and fill with the Tarrant County and other non core SEK leases as part of the going forward business strategy and execution of Hemi.
> Tarrant County moves forward, according to KAA Hemi has good number of the checkerboard lease in their back pocket that involves XTO and Chesapeake. Although these Tarrant County leases are in the background, he also keep saying DO NOT FORGET THE IMPORTANCE THAT THESE LEASES MAY HAVE.
> Bakken lease deal. Again deal was in definitive review with an interested group. Group wanted to do a non conventional transaction, KAA basically said no way.To many scams where a signing of the deed first before funds are in hand. Discussions and interest still on going.
> Wy lease deal was completed 10/15/08 creating a fully funded position for the Silvey Hemi-1 horizontal drilling project.
AI
