Infinity Gains CBM Green River Drilling Approval
Infinity Inc. plans to move forward with its drilling plans in the Green River Basin of Wyoming after the Bureau of Land Management approved three of four drilling permits for its LaBarge project there. Infinity has already drilled one coalbed methane (CBM) well in the basin, and independent engineers estimate net reserves of recoverable gas of more than 550 Bcf --- putting cumulative future potential cash flows (10% discount rate and price of $2.69/Mcf) at $374 million.
Infinity, headquartered in Chanute, KS, wants to drill CBM wells on its 25,000-acre property, and BLM is expected to approve the fourth permit following a full review of the archaeological inspection of the access road site, which should be completed in the next few weeks. The prospective wells are located on federal lands, and Infinity needed approval from both BLM and the Wyoming Oil and Gas Conservation Commission before drilling could begin. All of the permits were approved by the Wyoming Oil and Gas Conservation Commission in December 2000.
"We are extremely pleased to announce the BLM's long-awaited approval of permits for three of the planned four wells that remain to be drilled in our pilot program at LaBarge, and we anticipate approval of the fourth permit in the next several weeks," said Infinity CEO Stanton E. Ross. "Plans call for drilling activities to commence late this summer, and we are currently working to assure that necessary equipment will be available to meet this schedule. During the interim, management will examine the potential for strategic partnerships in the development of LaBarge, along with the alternative of drilling the initial wells on our own."
Ross said the independent Houston-based engineering firm Fairchild & Wells Inc. estimated the LaBarge property's estimated reserves. "Access to markets for natural gas produced from the initial LaBarge wells should pose no problem," said Ross. "The five wells in the pilot program are located within a few hundred yards of a lateral pipeline that connects to Williams Cos.' interstate gas transmission line connecting to the Opal Hub. From there, the gas can be shipped to most major markets in the United States."
The CEO said, "Contingent upon Infinity's access to the necessary financing, the drilling of our initial LaBarge wells, along with the drilling of 40 to 50 coalbed methane wells on our pipeline project, should considerably advance Infinity's development of its CBM resources in the Rocky Mountain region during the summer months." Ross said the company had recently completed five CBM wells in the pipeline project, "all of which are producing gas," and was encouraged by the initial production rates.
Infinity has also obtained the rights to develop approximately 28,000 acres for prospective CBM production in its pipeline project, which is also located in the Greater Green River Basin in Wyoming, and has the rights to approximately 16,000 acres in the Piceance Basin in northwestern Colorado.
In addition, the producer has begun production on its Cherokee Basin enhanced oil recovery project in eastern Kansas and recently acquired 16 active oil producing leases, which encompass approximately 2,000 acres in the Owl Creek Field of Woodson County, KS.
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