Through its wholly-owned subsidiary CEP-M Purchase LLC, HPG owns the former Marathon Oil Corporation North and South Fairway Assets. These assets consist of 1,614 Coal Bed Methane wells with associated flow lines and over 155,000 net acres.
Asset Highlights
Upside Potential
HPG has developed a 600 well recompletion plan for the property which is projected to produce an additional 15,000 Mcf per day when complete. HPG plans to drill an additional 350 wells within the Fairway leases. The Company is also actively working with gas marketing and compression firms to set additional compression capacity to handle their aggressive recompletion program in the North and South Fairway Assets.
Core Operating Areas- Ivy Creek / LS Draw / Kline Draw
- Wild Horse / Fitch Ranch
- Arvada / Crazy Woman
- House Creek
- Dead Horse Creek
- Twenty Mile Butte / Kingsbury
- Railroad
Grams and Mills Gillette There are a total of 57 wells in the Grams and Mills Gillette fields, with ten more wells to drill and an additional four wells in the permitting process. Seven wells have been recompleted and re-enhanced with seven more wells scheduled to begin the recompletion program. HPG has also replaced 18 water pumps on the property as part of its unique re-enhancement plan. Production from the Grams and Mills Gillette fields was 120 Mcfpd (thousand cubic feet per day) at the time of acquisition, and has increased to 800 Mcfpd to date. All natural gas produced in these fields and delivered to the point of sale was sold at a hedge price of $5.20/MMbtu until the end of 2010. Successful re-enhancement activities have increased production on the Grams and Mills Gillette an average of 129% on wells with prior production. The Company is proceeding with its re-enhancement activities in these fields to further increase production.
Asset Highlights
DRY FORK PROJECT
HPG has secured the lease rights comprising the Dry Fork Project, and has drilled seven wells on this lease. These completed wells are currently in the de-water phase with three wells beginning to show gas. Other wells drilled and maintained by HPG in this area have produced marketable gas for over seven years. The Company maintains secure control of all gas flow around the Dry Fork Project as well as to and from the Project. HPG also has current permitting approval for the Dry Fork Project.
Wyoming’s Powder River Basin contains approximately 33 trillion cubic feet of recoverable natural gas, of which the Dry Fork Project will capture an estimated 37 billion cubic feet.
Dry Fork Project: Phase I
HPG has drilled seven wells on the Dry Fork lease as the initial step of the Dry Fork project. These wells have been enhanced via hydrolysis. These wells are de-watering at a rate of 588,000 gallons per day each. Three wells have begun to show methane, and de-watering has been controlled to maximize gas collection. All seven wells are connected to the HPG infrastructure so that all produced gas is transmitted to a point of sale.
Phase I of the project will be comprised of 70 new wells. Well drilling time is three days per well drilling rig at a schedule intended to minimize cost and maximize revenue. HPG will run 2 to three rigs until all 70 wells are drilled.
Dry Fork Project: Phase II
Dry Fork Project Phase II is a continuation of Phase I comprising of 83 new wells. The drilling program is scheduled to begin in November 2011. Well drilling time is three days per well at a schedule intended to minimize cost and maximize revenue. HPG will run 2 to 3 rigs until all 83 wells are drilled with drilling to be completed in June 2012.
