Oil exploration and development companies are in a heck of a bind these days. Their dilemma is where to spend capital in order to get the most oil and gas out of the ground as fast as possible. Wells are being drilled and oil found in small respectable amounts, generating solid revenues for 100-150 bpd producing wells, but nearby well opportunities also exist, as do other lease options for that same company. Capital costs can only go so far when there are many possible profitable wells to be drilled, dictating the need for a well-managed capital plan. Finding a successful oil and gas company is a great way to profit. Finding a great oil and gas company with a well-managed plan is a better way to profit in the long run.
Baseline Oils & Gas Corp., an oil and gas exploration and development company, works to find and develop onshore oil and gas leases primarily in Texas and Indiana. The company is currently finding and pumping better than expected results at its Texas locations, and slowly moving forward with a partner at its Indiana gas locations.
Baseline Oil & Gas has put in its development time and is now reaping the rewards of its efforts. Recent activity at its Texas location is finding steady rates and pressures from new holes. As a result, it is reducing expected 2008 capital expenditures for its Indiana programs in favor of expanding and drilling more sites in Texas. Currently, the company holds leases totaling 4,600 acres in Texas and 171,000 acres in Indiana. Ownership in its Texas interests is near 100%, while in Indiana it is closer to 18-19%. Perhaps the largest plus in the company’s property holdings – past the near 100% ownership of the Texas leases – is that those acres are a conglomeration of proven reserves, past-positive ownership in the 1930’s with successes and undeveloped parcels nearby. The company is already pumping a solid 150+ bpd of oil and is ready to produce similar adjusted amounts of gas. In this regard, the company estimates that its current product mix is 54% oil and 46% natural gas.
Current oil prices are driving the company’s funding plans as it tries to capitalize. Its timing is perhaps just a second or so late but, in a general sense, this could be considered a relative point of view. The company has a solid base of reserves and is concentrating on getting them out of the ground. A solid and flexible plan is in place for Baseline Oil & Gas Corp. and it is being executed for maximum profit in a period of maximum profit potential. If the company continues its capital drilling campaign for 2008 as outlined, profits will be flowing for this year and many to come.
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