Share prices for Index Oil and Gas (OTCBB: IXOG) edged up ever so slightly today over yesterday’s closing price of 78 cents a share, starting out high at 85 cents a share and then quickly dropping to 79 cents a share after market open.While it’s still too early to tell how the shares will do for the rest of the day, there’s been enough news from the company in recent days to raise investor confidence – such as yesterday’s announcement that IXOG has entered into joint operating agreements for the drilling of the Cow Trap well in Brazoria County, Texas.
According to the announcement, this well – referred to as Ducroz 1 in the press release – is expected to “target gas in stacked Miocene objectives at depths ranging from 4,900 feet to 6,400 feet,” and that the well is expected to have a total depth around 6,800 feet. At this point, the company expects Ducroz 1 to be spudded during the second half of 2007.
“Cow Trap typifies the category of relatively low-risk well that Index uses to balance risk elsewhere in our expanding portfolio of wells,” Lyndon West, the company’s CEO, said in the release. “Given the low-risk profile and nearby successful analogs with excellent cumulative production, Cow Trap is a very attractive well for Index.”
This isn’t the only good news the company’s put out recently. On Monday, June 25, 2007, IXOG reported its financial results for its fiscal year ended March 31. Oil and gas sales rose to $457,046 as compared to $191,114 for the previous year. According to the results, this increase was mainly due to production increase from the company’s Walker and Vieman wells, and due to higher commodity prices.
Still, all this good news wasn’t enough to offset the company’s net loss of $2.2 million for 2007 – an increase of just under $600,000 from the previous year’s new loss of $1.6 million. However, the company said that $875,000 of the loss came from non-cash stock-based compensation costs, and that the net loss for 2007 was $1.3 million prior to the expense.
While this may seem like an overpoweringly negative thing to happen to a company, West wanted to remind his investors that hiccups like these were all too common for a new public company.
“This is our first full year of being a public company and we are very pleased with the progress the Company has made,” West said. “Going forward we expect substantially increased revenue flow from the successful wells drilled during Fiscal Year 2007, including Vieman 1, Hawkins 1, and the Serrano and Habanero wells located in Victoria and Goliad Counties in south Texas.
“We are especially pleased to report to our shareholders the advances of the Company’s business strategy,” West continued. “Having completed initial phases, the Company has now entered its most exciting phase of development. Our strong portfolio of drilling prospects in FY 2008 includes a larger proportion of potential high impact wells. These wells, if successful, can deliver much higher value, volume and follow-on drilling with the potential of exponential growth. Going forward, our strategy is to increase shareholder value by profitably increasing reserves, production, cash flow and earnings through a balanced risk and equity program of exploration and production drilling.”