Internal test results, couple with those of other local operators, have bolstered Mancos Shale natural gas prospects for Rapid City, SD-based Black Hills Corp., according to CEO David Emery, who offered an optimistic outlook in reporting increased profits for 4Q2012 and all of last year for the diversified utility and exploration and production (E&P) company.
Emery highlighted Black Hills’ current estimated 2.2 Tcf of gas reserves in the Mancos Shale in the San Juan and Piceance basins. “Reserves are expected to be in the 6-8 Bcf/well range,” he said, adding that the company has about 460 potential new Mancos wells.
“We are excited about our future,” Emery said. “We have strong growth opportunities in our utilities and are encouraged by the potential of our Mancos Shale gas assets, based on our test well results and other operators’ recent announcements.”
Despite warm winter weather and continuing low natural gas prices, Black Hills 4Q2012 net income was $29.8 million, or 68 cents/share, compared to $26.5 million (62 cents/share) for the same period in 2011, Emery said. Full-year 2012 results showed $85.2 million ($1.93) of net income, compared to $77.1 million ($1.92) for the previous full year.
Emery emphasized that the company intends to focus on strong growth through both its natural gas and electric utilities, which are expanding, and its E&P activities in oil and natural gas.
“In October, two credit rating agencies [Standard & Poor’s Ratings Services and Moody’s Investor Services] improved their ratings outlook for Black Hills from ‘stable’ to ‘positive,'” said Emery, adding that this reflected the company’s two major sales last year: a $166 million energy marketing business and $243 million in Williston Basin oil and natural gas assets (see Shale Daily, Oct. 1, 2012).
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