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TheStreet Open House

GMX RESOURCES INC. Provides Operational Update

We have spud our tenth operated well, the Lange 44-31-2H, located in Sections 30&3, Township 147N, Range 99W in McKenzie County North Dakota. The Company has an 89% working interest in the well and will target the Middle Bakken with a proposed total depth of 21,261' and a lateral length of 9,587'. The well will be our 2 nd well drilled with oil base mud and completed with a plug and perf completion in McKenzie county. It will be drilled parallel to the Lange 11-30-1H and provide another comparison similar to the Akovenko wells.

The Company has elected to participate in the drilling of the Marsh 41-16PH 2% working interest, which is located in Sections 16&21, Township 140N Range 97W in Stark County North Dakota.     

Management Comment

Michael J. Rohleder Company President said, "In our Q2 conference call we outlined a number of operational improvements that we expected to implement over the next few wells. These changes included using oil base mud during the entire drilling operation, switching to plug and perf completions versus sliding sleeve, using more proppant and using ceramic proppant in the mix. We also discussed the need for post completion operational improvements that would address the significant pump downtime we experienced in Q2 and into Q3 by installing more reliable diesel powered electrical generators on the pumps in the regions where no electrical infrastructure exists, which is most of our core acreage. We also stated that from this point our drilling will target the Middle Bakken in McKenzie and Billings Counties. The Basaraba 34-35-1H is a Middle Bakken well, located in Billings County that incorporates most of the aforementioned improvements and, based on the first five day production rate, has the potential to be our best producing well. It clearly demonstrates that the Middle Bakken with the right drilling and completion recipe can produce meaningful production and reserves. The Fairfield State 21-16-1H however was completed in the Three Forks and as we reported on our Q2 call was unfortunately compromised and ultimately less than one-third of the lateral was able to be stimulated even after we attempted to complete the process with a modified plug and perf scheme.   The early success we have seen with the Basaraba 34-35-1H and the log reports on the Fairfield State 21-16-1H showing similar Middle Bakken like the Basaraba suggests that future development in the Middle Bakken within the Fairfield State unit should yield similar results.    The Akovenko 24-34-2H well is our first well that will incorporate all of the changes I described and will be another important data point in our effort to determine the best development protocol. The Lange 41-31-2H will also provide very useful comparison information because it is being drilled parallel to the Lange 11-30-1H and will also incorporate all the improvements. We will continue evaluating our drilling and completion practices with the goal of delivering the best rate of return possible on our Bakken development program."

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