The energy markets of today have been on a wild ride, to say the least. Oil, however, appears to be receiving a majority of the attention as prices bounce around at the upper ends of its historic range. In a relative sense, however, many observers have paid less attention to the activities and price movements of natural gas. Gas pricing has been following oil on its way up with only small recognition. Those that do follow gas on a regular basis, however, indicate that gas has been quite a bit more stable, with regard to price, then its high-flying brother, oil.
Cubic Energy Inc., an oil and gas exploration and development company, works to discover and exploit oil and gas deposits primarily in Texas and Louisiana. The company operates at the lower-risk end of the exploration scale in hopes of finding additional reserves as sites are more fully developed.
Although the company works to discover and recover both oil and gas from its Texas and Louisiana properties, it has more recently been concentrating on its gas shale properties in Louisiana. Several vertical wells have been drilled to the 11,000+ foot mark to take advantage of the Haynesville shale located at several of the company’s drill sites; more are planned in the near future. Current estimates by the company indicate 286 BCF of total shale gas and 263 BCF of free shale gas per reservoir mile at its Estes site (upper and lower); a figure comparable to its Johnson Branch properties. Ownership of these properties by the company currently stands at 35% and 49% respectively.
From a general perspective, Cubic Energy is making fast progress in bringing its gas discoveries to market. Its pipe system is nearly complete at its Northern Johnson locations and ready to generate income. Further drilling programs are also scheduled to take advantage of solidly higher natural gas price points. The company’s low-risk strategy apparently is paying off nicely as it continues to follow its drilling program at two fairly lucrative sites. As the energy markets continue to operate at the upper end of their ranges, Cubic Energy Inc. is in a solid position to reap the benefits that gas and oil provide.
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