Bayou City Exploration, Inc. (fka BYCX)

[Bobwins]

I have bought a few at .06. Underwater at last price but obviously undervalued here and huge spread.

The company doesn't produce any PR's and website is out of date, showing Houston office and wrong officers.

They are now just buying into small working interest positions as non operating JV partners. The good results are from one well that has outperformed. They only have one well so there is risk of declining production that will impact their positive financials.

However, they report investing in three other drill packages that appear positive. The problem is that very few wells will measure up to their lone producing well. As this section of the 10Q shows, Sien#1 is producing 6200mcfpd and 70bpd oil. That is the equivalent of 1100boepd at 6:1 gas/oil ratio. We all know that the real world ratio is closer to 15:1 but that's still 483boepd. They have 10% WI or 48boepd net to Bayou. That's a great well for a small investment.

Rooke#1 sounds like a good well, testing at 450mcfpd and 40bpd but let's assume that it produces at 1/2 the testing level and at 15:1 gas to oil. 35boepd total and 3.5boepd to Bayou. So this well will add only about 7.5% to total revs. Shows how good Sien is and how difficult it will be to duplicate their good fortune on that well. Still Rooke#1 should replace depletion on Sien and keep results positive going forward.

Will try to contact the CEO and report. Bobwins

Key Developed Properties:
Sien #1: The Company owns an 8.1% royalty interest in 1 well located in Arkansas County, Texas which began producing in the fourth quarter of 2008. The well produces approximately 6200 Mcf per day and 70 Bbls of oil per day.
Rooke #1: The Company owns a 10% working interest in 1 well located in Refugio County, Texas which was drilled during the second and third quarters of 2009. The well went through completion and as of September 28, 2009 started producing about 450 Mcf per day and 40 Bbls of oil per day. It’s too early to know how this production will level out but the initial signs are promising.
Chapman No. 75-1: The Company owns a 10% working interest in 1 well located in Nueces County, Texas which was drilled during the third quarter of 2009 and has gone to completion. As of the filing date of this report it is believed that the well will be a producing well, but the level of the net revenues that the Company will receive is unknown. This should be known by the end of the year.
Powers #1: The Company owns a 2.5% working interest in 1 well located in Colorado County, Texas which was drilled during the third quarter of 2009 and has also gone to completion. As of the filing date of this report it is believed that the well will be a producing well, but the level of the net revenues that the Company will receive is unknown. This should be known by the end of the year.
Garcitas #1: The Company has committed to purchase a 10% working interest in 1 well located in Jackson & Victoria Counties, Texas. The well is scheduled to be drilled in the fourth quarter of 2009.
King Prospect: The Company has committed to purchase a 10% working interest in one well located in Refugio County, Texas. The well is scheduled to be drilled in the fourth quarter of 2009.