antsquires, information on Hemi's gas to get you started in your homework! There is even more info available now and keep in mind that I wrote this a while back so if some of the tense doesn't make sense that would be why.
------------------
A glimpse at Hemi's potential gas reserves as well as gas production...
I posted similar to the below originally in post #17163 but here is a little
reminder for the old timers and maybe unknown info for the new investors.
Hemi's proven oil reserves and tobe proven GAS reserves...
We all know Hemi has oil and a ton of it but very few actually ever
understand or talk about the huge tobe proven gas reserves on Hemi's
leases. xtrapink talks about it a bit and even mentioned the below in post
17082...
My opinion is that oil production is the "low hanging fruit" right now,
even though the natural gas (NG) and coal based methane (CBM) gas may hold
the keys to a dramatic increase in the estimated worth of Hemi's Kansas
reserves. Think in terms of BIG numbers when you imagine the potential
impact of proving up NG reserves in Woodson County.
I thought I'd go through some of Hemi's older PRs and interviews and see
what I could come up with. When piecing it all together and adding it all
up, it is incredible the amount of gas Hemi has yet it gets so little
attention.
Here is what I have been able to piece together just from what Hemi has put
in print. Keith has been known to hold back a bit on things he thinks are
very big and if what I've come up with below is holding back we are going to
be in for some very exciting times.
------------
Hemi has talked about some promising gas in Sabine County, TX as well as two
oil and gas leases totaling 640 acres in North Dakota. Hemi has also talked
about existing gas wells on their leases in Montgomery and Woodson Counties
in KS
In Sabine County, TX, Hemi has 360 acres with 3 adjacent oil and gas leases.
Wells in Shelby County that are about 4 miles to the north average over
2,000 mcf/day. The average well is producing over $400,000 per month when
using $7/mcf. These gas wells and gas fields have a slow rate of decline and
have an economical life of over ten years.
In North Dakota, there are three other leases adjoining Hemi's lease on
three sides and have five producing gas wells, owned by other companies,
which are within one mile and less of the Hemi lease. Each one of these five
wells have an approximate revenue of $4,000,000 or more over an economically
viable life of ten to fifteen years.
Now, in Kansas, Hemi has told us quite a bit about the gas under the leases
but is also holding back quite a bit as well. That's the impression I get
when reading the press releases, emails, and listening to the interviews.
Many view Hemi as an oil company because, for right now, all they are
selling is oil. But, if you look at just what we know about their gas it is
pretty incredible. Hemi's gas could end up being very very big.
In Montgomery County, Hemi has a shut-in gas well at a depth of 1250 feet
that is commercially producible. This lease also has two gas zones. The well
and the gas zones make developing the gas formations "financially obvious".
After mention of this well was made, Hemi talked of new research locating
natural gas wells that were drilled from 1950 to 1980 on the Montgomery
County leases. They were originally drilled as oil wells but instead of
finding oil, the developer found natural gas. These wells open flow tested
at 300 to 400 mcf/day. These wells are in the Mississippian formation. Hemi
has talked of at least 3 of these uncompleted gas wells existing. Hemi then
went on to tell us they have acquired additional leases that will be
their most valuable leases with reserves of all their Kansas lease
holdings. This is referring to gas value. Since the reserve report for the 5
contiguous leases has independently proven reserves in excess of
$100,000,000 then this new gas find would be valued in excess of
$100,000,000. Now, after listening to the 6/12/07 Wallst.net interview, one
can learn a little more about just how valuable this find actually is. This
gas find is not contiguous to their oil leases to the south. Existing wells
on the lease were drilled from 1916 to 1930 with 5 pay zones 800' to 1200'
deep. Newer wells were also drilled around 2002. Research data has shown the
wells drilled in 2002 flowed similarly to the wells drilled from 1916 to
1930. Now get this... the pay zones in one well could flow at 7,000
mcf/day to 15,000 mcf/day! However, it wouldn't be possible to produce
all pay zones at one time so one wouldn't expect to get that high of flow
out of each well but these would still be very prolific gas wells. The field
where all these wells are located has never been declared and Hemi intends
to name it the "Hemi Field". So, similar to the Humboldt-Chanute oil field,
Hemi could be in the history books with their "Hemi Field". Keith believes
this oil find will "totally validate Hemi's existence" and is what
they've been working for for years.
So, for Kansas, there are several wells in Montgomery which open flow tested
at 300 to 400 mcf/day so if you say there are only 3 of these wells you
could say 1000 mcf/day for these wells (be sure to check out xtrapink's
further number crunching in post 10090!). Then, who knows how many wells
there are on the new leases that have been defined as having prolific
gas? The plural "wells" is talked about as being drilled from 1916 to
1930 and again wells is plural for the ones drilled around 2002 so one can
assume at least four of these wells exist. Since just one zone flows at
3,000 mcf/day, if you just use the 3,000 mcf/day number for just 4 wells
that would be 12,000 mcf/day (likely very conservative). Tack on the 1,000
mcf/day from Montgomery County and you've got a conservative number of
13,000 mcf/day for wells that already exist. Gas is going for around
$7/mcf. Do the math. Even using conservative numbers, this is $2,730,000
worth of gas per MONTH. That's nearly $33,000,000 per year worth of gas
coming from a debt free pink sheet company! If Wilshire comes into the
picture and provides funding as talked about previously, all this would be
done and the company would still be debt free. The current market cap of the
company is under $15mil. Sound crazy and pie in the sky? Keith said in the
interview that if all goes well, the infrastructure to get this built could
happen in 6 to 12 months. With the amount of natural gas under Hemi's leases
and the price of natural gas, it isn't a stretch to think the bigger money
would go after this.
Keep in mind, all that is talked about above is what has been put in print
or talked about in interviews. Keith has stated a number of times he is not
going to show his entire hand until he is ready. If the above is what he is
willing to talk about, one has to wonder what it is he is not yet willing to
talk about :)
Even if Hemi has no intentions of immediately going after this gas it will
add tremendously to Hemi's reserves and independent proven reserves
are what primarily makes up the value of these type companies. Keith has
been spending extra money when drilling and getting core samples and having
these sent off and analyzed. Why? He has already drilled the hole but is
trying to learn how better to drill the next well plus, IMO, using this
information to prove up additional reserves. Don't forget too that our
current independent reserves report doesn't include all the pay zones.
Anyway, I know we all talk about Hemi's oil but often, it seems, overlook
this very valuable gas. I connected some of the dots from all these press
releases and interviews and just wanted to share what I found and further
show everyone just how undervalued Hemi actually is.
News 
Market Data 
Discover 
AI
