May 2006
By Upstream staff
Denver-based
Galaxy Energy is planning to spend an initial $15 million for land
acquisition and drilling in Colorado's Piceance basin in a bid to
boost profitability by building a up thicker coalbed methane and
gas portfolio in the western Rocky Mountains, writes Tom Darin Liskey.
The company said it is nearing the halfway mark in a 10-well drilling
programme for gas development in the Piceance basin after it recently
began spinning the drill bit in a fourth well as part of a 10-well
project. A Galaxy Energy Investor Relations source said the programme
should be completed by the end of the year.
The company only holds small working interests in the first two
wells that were drilled, the source said.
However, the Piceance basin in north-west Colorado is thought to
hold trillions of cubic feet of proven and potential gas reserves
and the drilling programme if successful will help the company to
grow output.
There, Galaxy Energy holds around 6000 acres under lease with a
25% working interest. The company currently produces around 1.2
million cubic feet from its Wyoming interests.
Overseas, the company has about 22,000 acres under lease in Romania
with a 25% working interest in one drilled well.
Canada's Falcon Oil & Gas holds a 75% stake in that Jiu Valley
coal basin concession.
Galaxy and Falcon want to test the well for completion, but no exact
time for that was available.
Galaxy Energy also has about 149,000 acres under lease in a German
conventional gas play with a 25% working interest with one well
drilled.
•Galaxy has clinched a $4.5 million private placement debt
deal, selling subordinated convertible debentures that it hopes
will stave off the threat of being delisted from the country's second-largest
stock exchange.
AMEX informed the company last week that it was running the risk
of having its shares delisted if Galaxy failed to meet certain compliance
rules. Galaxy expects to submit a plan by 10 May.
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