GeoResources (GEOI)

[dan_s]

“January 7: Sweet 16 member GeoResources (GEOI) Raised To Outperform By BMO and reiterated by Global Hunter Securities as a Buy.”

The analysts really like their Eagle Ford Shale JV and so do I. My Fair Value estimate has been raised to $27/share.

GeoResources has assembled approximately 21,000 net acres, including working interests ranging from 32.5% to 65%, in the Eagle Ford trend of Texas in Atascosa, Fayette, Gonzales and McMullen Counties. They believe the vast majority of the acreage is over-pressured and in the volatile oil to high condensate windows of the Eagle Ford trend.
Their first well will be drilled on a 900 acre drilling unit located in southwest Fayette County and they expect to begin drilling their first well in this unit, the Flatonia East Unit #1H, in January. The unit will accommodate up to nine wells depending on ultimate spacing.
GEOI has a 50% working interest in the unit and the well. They have entered into agreements with Ramshorn Investments, Inc., an affiliate of Nabors Industries LTD, related to an area of mutual interest (“AMI”) in southwest Fayette County, Texas. Ramshorn has acquired a 50% interest and agreed to jointly acquire additional acreage and implement a drilling and development program within the AMI. At present, the partners are planning 12 -13 wells across the acreage position in 2011. In six of the wells GeoResources has a 50% carried working interest through the tanks.