what will monday bring?, page-29

Production figures, maps etc for Reagan county r all on Tx-RRC site & GGP trade as Kindee Oil. So worth doing yr research.

http://webapps.rrc.state.tx.us/DP/initializePublicQueryAction.do

So far (till July this calendar year) the county has produced apprx 4.98 MMbbls of oil & 23.79 bcf of gas.

Dont have a well count, else could have done a rough daily flowrate/well calc.

The Wolfberry trend is a low risk, high well density/acre trend or fairway & is a low cost operation, which should pay itself off in a short period. Hence the need to drill a dozen odd wells that could flow 30-50 bopd frm vertical wells.

GGP picked this up acreage for US3.5mil for 8806 acres frm Arturus Capital (AKW).

AKW had paid US$2.394 mil in March 2010 for this play.

GGP will have to pay a 28% royalty on production for the 1P reserves of 4.358 MMbbls oil & 11.543 bcf of gas.

The area is close to existing gas pipelines & has plnty of donkeys (beam pumps, i.e).

Vertical wells average 30-50 bopd from various intervals & hence the high density of shallow wells (6000-10000 feet TD).

GGP's S#6 well report indicated that the well most likely kicked oil onto the shakers (lost circulation & then oil on surface means fractures etc r present, which is good for oil to move along in the reservoir as long as the reservoir doesn't cave in). So oil appears 2b mobile.

IMHO, they really need to drill a 500-1000m horizontal section to have higher flowrates (i.e, get more exposure to the reservoir).

GGP's interest is 100% in this play. So IMO, they'll need funds to cover drill/testing costs of say upto 10-12 wells, as US$2.5 mil won't b enough for now.

Expect 2 wells to flow & volume to rise b4 the any Cap Raise annc'mnts (classic pattern for most junior listed oilers on the ASX).