Monday, November 24, 2008

Haynesville Shale: GMXR First well Completed

GMX Resources ( GMXR ) announced last week that they have completed their first Haynesville Shale well.

GMX Resources Inc., (Nasdaq:GMXR) ("GMXR") (visit to view the most recent Company presentation and for more information on the Company) today announced completion and initial production results for the Callison 9H, the Company's first Haynesville/Bossier Shale (H/B) horizontal well.

The Callison 9H (100% WI) located in the William Smith a21, Harrison County, Texas has the Company's shortest planned lateral of 2,200 feet. The well was placed on production November 20th and is currently producing at a stabilized rate of 7.7 mmcf/d, on a 22/64" choke with 5,200 pounds flowing casing pressure. The completion consisted of an eight stage fracture treatment. "We have budgeted 2009 based on a beginning production rate of 3.4 mmcf/d," stated Ken Kenworthy, CEO of the Company.

The Company is currently drilling two H/B horizontal wells. Completion of the Bosh 11H and the Baldwin 17H will take place 1Q09. A fourth H/B horizontal well is expected to spud within two weeks. Forty-five H/B horizontal wells are currently planned for 2009. The next 16 H/B horizontals are expected to average a 3,800 foot lateral and 11-12 stages of fracture treatments. The Company has previously forecasted 2009 production to be 30 Bcfe which is greater than 100% growth over 2008. The Company has 480 H/B horizontals to drill on 80 acre density, which includes the recently completed Callison 9H.

GMXR is a 'Pure Play', E & P Company and one of the most concentrated Haynesville / Bossier Shale Operator in East Texas. The Company has 435 BCFE in proved reserves (YE2007) and 3.2 TCFE in total 3P reserves that are 94% natural gas and consist of 480 net Haynesville /Bossier 80 acre horizontal locations and 318 gross / 180.9 net Cotton Valley ("CV") producers; 2,652 gross / 1,971 net CV un-drilled locations with a 100% drilling success rate. Five operated drilling rigs are currently developing this contiguous, multi-layer gas resource play on the Sabine Uplift; Carthage, North Field, in Panola & Harrison County of East Texas, and Caddo Parish of North Louisiana. The Company has invested $100 million in infrastructure which has contributed to 'Best in Class' finding and development costs. There are also 46 gross / 38 net Travis Peak/Hosston Sands & Pettit producers on the property. These multiple resource layers provide high probability and repeatable, organic growth. The Company, headquartered in Oklahoma City, Oklahoma, has interests in 386 gross / 235 net producing wells and operates 81% of its reserves. The Company's strategy is to grow shareholder value through Haynesville/Bossier Shale horizontal well development as well as Cotton Valley Sand vertical wells, to continue acreage acquisitions, to focus on operational growth around its core area, and to convert its natural gas reserves to proved, while maintaining balanced prudent financial management.