CREDO Updates Operational Activities
11 December 2008 - 12:00AM
Business Wire
CREDO Petroleum Corporation (NASDAQ:CRED) today updated its
drilling and Calliope Gas Recovery System activities. James T.
Huffman, Chief Executive Officer, stated, �We have recently drilled
successful wells in Oklahoma and Kansas in which CREDO owns very
substantial working interests, ranging from 50% to 85%. Electric
logs and drilling data for each of the wells look promising, and we
believe that the wells have the potential to significantly increase
our production and reserves. In addition, we are currently drilling
a high potential oil well in southern Oklahoma where CREDO owns a
44% working interest.� Central Kansas Uplift�On the Central Kansas
Uplift, CREDO has drilled a wildcat well on a 2,150�gross acre
seismically defined prospect. Production pipe has been set through
the Lansing-Kansas City formation. The well is classified as a
�tight hole�, meaning that detailed information is not being
released for proprietary business reasons. CREDO owns an
85%�working interest in the prospect and is the operator.
Development drilling is scheduled. CREDO currently owns 139,000
gross (65,000 net) acres located on the Central Kansas Uplift and
is continuing to expand its acreage position in both Kansas and
Nebraska. To date, the company has participated in drilling a total
of 32 wells on the acreage, of which 47% have been successfully
completed as oil producers. Well depths range from 3,500 to 4,000
feet and drilling costs are moderate. �Our drilling success on the
Central Kansas Uplift continues to be outstanding,� Huffman said.
�In addition to providing good diversification to our other
drilling activities, this project is 100% oil and will improve the
balance between oil and natural gas in CREDO�s reserve base. We
expect the play to make a major contribution to our reserve and
production growth.� Oklahoma�In western Oklahoma, CREDO recently
drilled two wells, Lemmons #1 and Ball #1, on its 1,280 gross acre
Pool-Proffitt Prospect. The 9,300-foot wells targeted the Chester,
Mississippian and Hunton formations. Based on analysis of electric
logs and drilling data, over 150 feet of Mississippian formation
will be perforated and tested in the Lemmons well together with 31
feet of Chester formation. The well is currently being completed
for production. CREDO owns a 73%�working interest and is the
operator. About one mile to the south, the Ball #1-18 has been
drilled and is currently awaiting completion for production. Over
150 feet of the Mississippian formation will be perforated and
tested based on analysis of electric logs and drilling data. In
addition, the Chester formation contains excellent porosity and 35
feet will be perforated and tested. CREDO owns a 50% working
interest and is the operator of the well. Huffman further stated,
�The Pool-Proffitt area has multiple productive intervals in the
Hunton, Mississippian and Chester formations which will require a
significant number of wells to properly develop. CREDO�s acreage is
under-drilled compared to offsetting sections to the east where up
to nine wells have been drilled in each section in order to fully
develop the reserves. We are very pleased with the outcome on the
Lemmons and Ball wells, and we expect to ultimately drill 10 to
12�wells on the leases.� CREDO is currently drilling a high
potential oil well in Carter County, in which it owns a 44%�working
interest. The Schaff #3 is a twin well to the Schaff #1, which has
produced 235,000�barrels of oil. The Schaff #1 will become part of
the Twin Forks Deese Sand Waterflood Unit. The new twin well will
develop three deeper oil sands that Schaff #1 electric logs
indicate are�productive but which were never perforated. CREDO is
the operator. Calliope Gas Recovery System�Management believes that
the company is making solid progress on Calliope as it actively
discusses commercial terms related to specific wells that have been
nominated by several companies. Calliope�s low finding and
production costs have become increasingly attractive as the
economics on many drilling projects deteriorate due to lower
product prices. The company also believes that lower natural gas
prices may stimulate divestitures of marginal properties by other
companies, including properties that have Calliope potential. CREDO
owns an exclusive license to the Calliope patents and the related
technology. However, in order to establish absolute control over
the technology and to eliminate the company�s future costs for
individual well licenses, CREDO recently purchased the underlying
patents. The purchase price was $4,500,000. In addition to the
Calliope patents, the purchase price included acquisition of the
patents covering a new fluid lift technology for shallow wells
known as Tractor Seal. Management Comment�Huffman further stated,
�CREDO entered the current economic and energy price downturn in
excellent financial condition with significant cash on hand and no
debt. We believe that opportunities are rapidly improving to deploy
our capital on projects that will enhance shareholder value. Our
Calliope system offers an increasingly competitive alternative for
efficient, large-scale reserve additions, particularly in the
current price and cost environment. In addition, we are very
pleased with our recent drilling results, and we anticipate that
the new wells discussed in this release will add significantly to
our production and reserves.� For more information about the
company, visit http://www.credopetroleum.com. CREDO Petroleum
Corporation is a publicly traded independent energy company
headquartered in Denver, Colorado. The company is engaged in the
exploration for and the acquisition, development and marketing of
natural gas and crude oil in the Mid-Continent and Rocky Mountain
regions. The company�s stock is traded on the NASDAQ System under
the symbol �CRED� and is quoted daily in the �NASDAQ Global Market�
section of The Wall Street Journal. This press release includes
certain statements that may be deemed to be �forward-looking
statements� within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. All statements included in this press release,
other than statements of historical facts, address matters that the
company reasonably expects, believes or anticipates will or may
occur in the future. Such statements are subject to various
assumptions, risks and uncertainties, many of which are beyond the
control of the company. Investors are cautioned that any such
statements are not guarantees of future performance and that actual
results or developments may differ materially from those described
in the forward-looking statements. Investors are encouraged to read
the �Forward-Looking Statements� and �Risk Factors� sections
included in the company�s 2007�Annual Report on Form 10-K for more
information. Although the company may from time to time voluntarily
update its prior forward looking statements, it disclaims any
commitment to do so except as required by securities laws.
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