Dejour Energy, the hydrocarbon E&P focused on their substantial land positions in the Piceance Basin (some 117.5k net acres) and Peace River Arch region (another 7.5k or so net acres), reported today that they have inked the necessary contracts to tap directly into the eastern Piceance regional gas infrastructure via the region's major aggregator, with logistical tie-in and building of the associated metering station slated to commence immediately.
Moreover, post tie-in, DEJ will do completions directly with big daddy Haliburton for the frack jobs, after which the wells will be put into production. This is a big hurdle cleared for DEJ, whose flagship Kokopelli project (72% WI, average of 93% WI in initial four wells subject to a previously announced production sharing agreement with a major local drilling fund based in Denver) is being evolved into a much broader production window amid firming gas prices. Today's announcement sets shareholders up nicely to take advantage of improving prices and the company's operational expansion potential.
In fact, DEJ is now looking to put in as many as 27 potential wells targeting the Mancos and Niobrara formations via their two Kokopelli leases (2.2k gross acres), with the potential to support some 200 additional Williams Fork wells. The first whiff of this should come to investors in Q4 this year as a high potential production test well is set to be put into the Mancos at Kokopelli.
Also reported today was the healthy jump in output at DEJ's Woodrush property in the Peace River Arch, as gross field production was 20% higher for the first two months of the quarter than in Q1, coinciding with field netbacks over $38/BOE thus far throughout Q2. Woodrush did an average of 606 BOE/day in the first two months this quarter and the company owns and operates 75% of this field, giving markets a solid secondary vector on the company's recent performance.
Kokopelli is being molded for the next wave of development here and is in good company with neighboring Barrett Resource and Williams Co. lands, the latter of which is essentially an extension of the Mamm Creek field. The potential at Kokopelli is readily reinforced by the productivity of such neighbors and shareholders are expecting big things out the field, especially now that the logistical throughput has been reinforced through these gas infrastructure access contracts and the wells are headed for completion.
DEJ really has an attractive portfolio of production and growth potential for investors to take a look at. This tie-in deal and the exceptionally bright future of Kokopelli in particular make the company a real up and comer to keep a close eye on as the summer progresses.
Would you like to know more? Visit Dejour Energy Inc. online at Dejour.com
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