GMX Resources GMXR announced third-quarter results Friday. Production from East Texas increased 5% sequentially to 3.49 billion cubic feet of natural gas equivalent. We were pleased to see operating expenses and general administrative expenses decline 5% and 14%, sequentially. GMX drilled and completed two more horizontal East Texas wells during the quarter and completed one additional well since quarter-end. The 30-day average for these wells was 5.7 million cubic feet per day. Completed well costs for the most recently drilled well are expected to be under $7 million. GMX updated its production estimates and capital budget for 2010 and 2011. Production guidance with three rigs is 17 and 25 bcfe for 2010 and 2011, respectively. With four rigs, guidance is 19 and 30 bcfe, respectively. Assuming a three-rig program in both 2010 and 2011, the firm expects to spend $190 million and $200 million in the respective years. Assuming a four-rig program in both 2010 and 2011, the firm anticipates spending $220 million and $245 million. In our current model, we assume the four-rig program on the basis of liquidity-enhancing measures undertaken this quarter, including the midstream asset sale and a recent equity issuance.
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Analyst Notes
10-20-09 | 12:10PM GMX to Issue 5.75 Million Shares
08-04-09 | 9:35AM GMX Posts Positive East Texas Results
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