TREK...add'l reserves are on the way....from last 10q:
This decrease in volume was offset in part by production from the purchase of two new gas wells in Cottle County, Texas in the second quarter of fiscal 2004, as well as a recompletion of a well in Ochiltree County, Texas during the same period.
Also, the retirement of debt in this para relects add'l payments against debt that were above and beyond sked debt retirement, thus reducing interest load and improving bottom line...result of strong cash flow...and this para also reflects significant payments on development activities during the 9mo...which should result in larger reserves by year end:
Our working capital was $460,000 on June 30, 2004. For the nine months ended June 30, 2004, capital expenditures of $2,159,000 and retirement of debt of $700,000 were funded by cash flow from operations. During the same period in 2003, capital expenditures of $237,000 and the retirement of debt of $1,630,000 were funded by the sale of securities and cash flow. The increase in our capital expenditures for the nine months ended June 30, 2004 as compared to the corresponding period during the previous year was mainly a result of our development activities in King, Eastland and McMullen Counties, Texas, and Claiborne Parish, Louisiana.
Finally, this wraps up developments in 2nd and 3rd qtr which should add to overall reserve growth at year end:
from last 10q:
In the quarter ended June 30, 2004, we purchased two producing natural gas wells located in Cottle County, Texas for $345,000. This acquisition, effective March 1, 2004, was reflected in the capital additions for the second quarter. We took over the operations of these two wells on April 1, 2004, and they are currently producing a total of approximately 4,800 Mcf per month.
We did not drill any new wells during the three months ended June 30, 2004. However three non-operated wells in Oklahoma, in which we have an ownership interest, were drilled and successfully completed during the period. In the second quarter we drilled two new wells in Cottle County, Texas in partnership with P. C. Burns Oil Producers, Inc. ("Burns"). The total estimated costs associated with these new wells are $850,000. We paid 52% of these drilling and completion costs ($435,000) and Burns paid the remaining 48%, representing our respective working interests in the wells. These wells began producing small amounts of natural gas in March 2004, however additional completion procedures are continuing.
Our capital expenditures during the third quarter of fiscal 2004 included the creation of a waterflood at our TXL lease in Nolan County, Texas. This project, with an estimated cost of $75,000, installed water injection wells into the productive zone to enhance oil recovery. Another project was the ongoing recompletion of two natural gas wells at our AWP field in McMullen County, Texas at an approximate cost of approximately $50,000 each, which began in the second quarter of fiscal 2004. Finally, remediation work on a natural gas well in Major County, Oklahoma commenced in mid-May 2004. The cost estimate for this project is $50,000. We expect to fund our present capital expenditure commitments with cash flow from operations.