Market Briefing
There is much market interest in the oil exploration and production that is occurring in the Permian Basin. Golden Gate Petroleum (GGP or the Company) has substantial exposure to this region – can you provide us with any further details concerning your project in respect of the acreage position and future wells?
Stephen Graves
GGP holds over 8,800 acres, made up of four separate leases. Having four leases provides us with the ability to modify the development plan to optimise the value of the capital we can employ while minimising risk by not over committing the Company. For example, most of our activity, which includes the four existing vertical wells and the first planned horizontal well, has been on two leases. If we believe a reduced capital program is most appropriate, our focus can be on these two leases. The funds required to drill and retain two leases would be about half of retaining all four leases. Alternatively, we can focus on the three leases with the best geometry for horizontal well development. In summary, the development plan will depend on the capital available from existing project cash flow and financing plus our ability to raise new funds.
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