JayHawk Energy (JYHW) is a development stage crude oil and natural gas company primarily exploring for the aforementioned resources in Colorado, Kansas and the surrounding areas. JayHawk owns interest in the Uniontown project covering 35,000 gross acres of non-producing coalbed methane natural gas reserves located in Bourbon County, Kansas. The company also shares 12 miles of common boundary with natural gas giant, Devon Energy, in Kansas.
The land shared with Devon is roughly equivalent to 35,000 acres and is estimated to have as much as 78 billion cubic feet of natural gas. Devon, the largest independent gas producer in the U.S. Questa Engineering Corp., said that on the high end, annual revenue for the 35,000 acres owned by JayHawk could be almost $395 million, and that was using a much lower price for natural gas because the assessment was done in 2005. Although natural gas is in abundant supply in the U.S., its price has skyrocketed over the past three decades.
Colorado-based JayHawk recently drilled and cased the second 10 wells of its Cherokee Basin project, located in southeast Kansas, bringing the total number of completed wells to 20 (out of the company’s 100-well program). The U.S. Department of Energy estimates 2.8 trillion cubic feet of potential recoverable reserves could be available in the Cherokee Basin. The company also has a significant project underway in North Dakota. Insiders own about nine percent of the company and two institutions own almost 3,000 JayHawk shares.
JayHawk shares closed Monday at $1.25 and have traded between 86 cents and $2.75 over the past 52 weeks. The company has a market value of $53.2 million. There are about 42.5 million JayHawk shares outstanding. Investors should note that company has yet to turn a profit and has little cash on hand, placing added emphasis on the importance of the Cherokee Basin project.
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