20 Dec 2013
GMX Resources Inc. (GMX), incorporated in 1998, is an independent oil and natural gas exploration and production company with a portfolio of leasehold acreage in multiple resource plays. GMX is focused on the development of the hydrocarbon formations in East Texas including the Cotton Valley Sands (CVS) layer in the Schuler formation and the Upper, Middle and Haynesville/Lower Bossier layers of the Bossier formation (the Haynesville/Bossier Shale), in the Sabine Uplift of the Carthage, North Field primarily located in Harrison and Panola counties of East Texas. The Company has three subsidiaries: Diamond Blue Drilling Co. (Diamond Blue), which owns three drilling rigs; Endeavor Pipeline Inc. (Endeavor Pipeline), which operates its water supply and salt water disposal systems in its East Texas area, and Endeavor Gathering, LLC (Endeavor Gathering), which owns the natural gas gathering system and related equipment operated by Endeavor Pipeline. Kinder Morgan Endeavor LLC (KME) owns 40% membership interest in Endeavor Gathering.
During the year ended December 2011, the Company acquired core positions in over 75,000 undeveloped net acres in two of the oil resource plays in the United States. During the 2011, the Company acquired all of the working interest and an average greater than 80% net revenue interest in approximately 35,000 undeveloped net acres of oil and gas leases located in Billings, Stark, McKenzie and Dunn Counties of North Dakota, and Richland, Sheridan and Wibaux Counties of Montana. During 2011, the Company acquired all of the working interest and an 80% net revenue interest in approximately 40,000 undeveloped net acres of oil and gas leases located in Platte, Goshen and Laramie Counties of Wyoming. During 2011, the Company acquired approximately 35,000 net acres in the Bakken/Three Forks oil resource play, which provides the Company with over 400 potential horizontal locations.
As of December 31, 2011, the Company owned 386 gross (250.2 net) producing wells. In the Company's East Texas core area, 302 gross (174 net) wells were Cotton Valley Sands wells at depths of 8,000 to 12,000 feet, 41 gross (35 net) wells were productive in the shallower conventional Rodessa, Travis Peak, Hosston and Pettit formations in its core area, and 38 gross (37.6 net) Haynesville/Bossier Shale horizontal wells were producing, with 5 gross (2.8 net) wells in Louisiana as of December 31, 2011. As of December 31, 2011, the Company had approximately 253 net proved and unproved Haynesville/Bossier Shale drilling locations (based on 80 acre well spacing) in Harrison and Panola Counties, Texas surrounded by its existing wells and other operators drilling Haynesville/Bossier Shale wells. The Company's H/B acreage as of December 31, 2011 was approximately 53,000 gross and 35,000 net acres.
As of December 31, 2011, the Company had approximately 55,000 gross and 36,000 net acres in the Cotton Valley Sands formation, with 83 undrilled Cotton Valley Sands horizontal drilling locations in its core East Texas area based on 80-acre spacing. The Company's East Texas area properties accounted for more than 98% of its total proved reserves at December 31, 2011, 48% of its total net acreage and 99% of its production. The Company operates 182, or 47%, of its East Texas area gross wells, which operated wells produced 91% of its oil and natural gas production as of December 31, 2011. During 2011, average daily net operated plus non-operated production in 2011 was 57.3 million cubic feet of gas and 1,150.8 barrels of oil and natural gas liquids. Natural gas and oil have been produced from 3,000 feet to 11,700 feet in the Company's core area.
D.J. Basin - Niobrara
The Company entered the Niobrara with two transactions for approximately 40,000 net acres in south-western Goshen, south-eastern Platte and north central Laramie Counties in Wyoming, with a minimum 80% NRI. Approximately 20% of the total net acres are new federal leases with 10year terms. The approximately 40,000 net acres provides the Company with a development potential of 250.5 net wells using four wells per 640-acre unit. In addition to the Niobrara, the project area contains two other targets that are known producers in the DJ Basin. The Codell Sandstone formation produced 30 million barrels of oil and 320 billion cubic feet of gas in the Wattenberg Field.
Other Oil and Gas Properties
As of December 31, 2011, the Company had approximately 2,400 gross (2,100 net) acres in the Waskom Field in Caddo parish in Louisiana with five gross (2.6 net) producing wells, three of which it operates. During 2011, total reserves and production from these areas represent less than 1% of the Company's proved reserves and production.
Oil and Gas Gathering
GMX has, through its majority-owned subsidiary, Endeavor Gathering, gas gathering lines and compression equipment for gathering and delivery of natural gas from its core area that it operates. As of December 31, 2011, Endeavor Gathering had invested in this gathering system, including the purchase of compressors and pipe inventory, which consisted of over 110 miles of gathering lines and approximately 15,000 horsepower of compressors that collect and compress gas from approximately 99% of the Company's operated gas production from wells in its core area. As of December 31, 2011, this gas gathering system had takeaway capacity of 254 million cubic feet per day. As of December 31, 2011, Endeavor Gathering only gathers from wells, in which the Company owns an interest. Remaining gas is gathered by unrelated third parties. PVOG has installed and operates gathering facilities to each of the wells drilled and operated by PVOG in the Company's jointly-owned areas. PVOG charges the Company a gathering fee of $0.10/ million metric british thermal units. PVOG has installed and operates gathering facilities to each of the wells drilled and operated by PVOG in the Company's jointly-owned areas.
One Benham Place 9400 North Broa
OKLAHOMA CITY OK 73114