Management at Denver-based PRB Energy Inc. was at a loss Wednesday to explain a precipitous drop in the price of its shares, down nearly 17% to $3.13. Trading volume was nearly 34 times the recent daily average for the shares, which are traded on the AMEX.

The stock’s previous 52-week range was $3.70-$7.05. The previous close was $3.77, and shares got down as low as $2.91 Wednesday.

“We know of no unannounced corporate or economic developments that would account for the recent decrease in PRB Energy’s stock price,” said CEO Robert Wright. “We continue to execute on our previously announced business plan of increasing production on the recently acquired Pennaco properties and are formulating a drilling development program on these properties to be initiated late in the fourth quarter of 2006 or early in 2007. In addition, we continue to increase volume throughput at our Recluse gathering system.”

PRB is an oil and gas exploration and development company operating in the Rocky Mountain states. In addition, PRB provides gas gathering, processing and compression services on properties it operates and for third-party producers.

Earlier this year, PRB acquired about 630 coalbed methane wells on 29,500 acres from Pennaco Energy Inc., also of Denver (see Daily GPI, July 6). PRB is the principal gatherer serving the wells. Many of the wells are shut-in. Fewer than 200 are producing 2.5-3.0 MMcf/d. PRB said it plans to bring shut-in wells back to a productive status. “This transaction should enlarge our revenue base immediately as well as offer PRB significant upside potential as we seek to expand gas volumes for our GAP and Bonepile gathering systems and eventually reactivate as many shut-in wells as possible,” Wright said at the time. “Longer term, we expect to initiate drilling of approximately 300 Moyer coalbed methane wells on the newly acquired acreage.”

More recently, in August, PRB completed the acquisition of seven segments of pipe totaling about 70 miles near Recluse, WY, in the Powder River Basin (see Daily GPI, Aug. 7). PRB said the combined pipelines will allow it to expand gathering services to more producers producers in the approximately 100,000 acres surrounding the pipelines. Management said it plans to tie the acquired gathering assets into those purchased earlier this year from Storm Cat Energy and Clear Creek Gathering, which in turn connect to two major pipelines, one heading north and the other south. This will enable third party producers to obtain optimum commodity pricing. PRB believes that this enhancement should stimulate gas production by third parties, which PRB plans to encourage by pursuing working interest agreements with land owners and leaseholders.

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