GILLETTE, Wyo., June 13, 2011 /PRNewswire/ -- High Plains Gas, Inc. (OTC: HPGS) Chief Executive Officer, Brent Cook, commented further today on the Company's third quarter 2011 well reactivation strategy.
Brent Cook, CEO of High Plains, stated: "Following the announcement of our well reactivation strategy on June 9, 2011, I would like to provide a more detailed review of our strategy and production process to more specifically address its impact on our growth strategy.
The Fairway Asset that High Plains purchased from Marathon Oil in late 2010 contained roughly 1,100 wells that had been "shut-in" and were not bringing methane gas to market. We took advantage of this great opportunity to reactivate those wells to produce gas. While we do not anticipate reactivating all 1,100 wells, we do anticipate reactivating roughly 900-1,000 of those wells. Our costs for purchase and reactivation have averaged roughly $10,000 per well, versus costs of drilling a new well currently ranging between $120,000 and $280,000.
Our strategy on the Fairway Asset and future acquisitions will be to turn on idled wells that we believe will make gas in economically attractive volumes. Our acquisitions strategy has always been to buy cash flow in the form of current and easily-accessible production, and to run those assets in a manner that is profitable to the company. We expect this strategy to again play out as we work to close the acquisition of the J.M. Huber energy division by the end of the second quarter."
Source: PR Newswire
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