Cubic Energy - QBIK - Haynesville Minnow ($2.94 as of
6/03/08). I don't often traffic in penny stocks and when I have in the
past, the results have often been painful, especially in this "everything over
$10 goes up, everything under $10 gets forgotten market". I pointed these guys
out way back in March when HK first highlighted the Haynesville as an oddity
that was so low dollar that buying the shares of the company amounted to a call
option in an of itself. But ya know, these guys are drilling wells in the play,
so I decided to have a closer look. In a nutshell, they produce a little gas
from conventional zones and have 6,326 net Haynesville acres "on structure" and
have identified 300 drilling locations (although many of those will be
traditional can't miss Lower Cotton Valley wells).
The Last Look At Reserves: 3P reserves (proved, probable
and possible) of 30.8 Bcfe were estimated in October 2007. This was all
attributable to the Cotton Valley formation and economics were based on a pretty
conservative price deck (prevailing at the time) of $60.59 oil and $6.66 natural
gas. Implication is that at current prices economic reserves would expand and
that this report did not take into account Hayneville Shale potential.
Properties - Extreme Northwest Louisiana - Two fields in the heart of
Lower Cotton Valley (and now Hayneville Shale) country. This is also
stacked pay country as you have five plays on the way down to the Haynesville at
just over 10,000 feet. They have drilled 20 wells to date with 100% success
which is not as impressive as it sounds in the Lower Cotton Valley. Three of
wells, all verticals, went deep enough to see the Haynesville Shale and their
fourth Haynesville well, the Estes 7 No. 1, was spud June 2.
- Johnson Branch, Caddo Parish, LA. Due west of the Elm Grove
field, QBIK they are 12 for 12 with wells drilled here.
- Bethany Longstreet, border of Caddo and De Soto Parish's to
the south of Johnson Branch lies they are 8 for 8 with wells here. This is where
they spud the Estes 7, No. 1 test which will be completed as a vertical well
with the option of a horizontal lateral to be drilled in the future. They have a
35% working interest in the Este well which is operated by Fossil Operating who
has drilled a number of wells in the area to this depth. They plan to drill a
fifth well immediately following the Estes.
Chesapeaks Surrounds QBIK's Johnson Branch
Acreage. In the immediate vicinity of QBIK's three deep tests, CHK is
producing from 3 horizontal wells (rates not yet disclosed), is currently
drilling another six horizontals (as of Mau 28) check Sonris and is in the
process of permitting initial wells. Chesapeake has said they will announce test
rates from a number of their horizontal Haynesville tests in early August on
their 2Q conference call.
Goodrich Acreage Surrounds QBIK's Bethany Longstreet
Acreage. (GDP) has a number of wells that are currently testing in the
Bethany Longstreet Field.
