Bluegrass Energy Inc. is a domestic oil and gas development and exploration company. The company has begun to act on its plan to secure a significant asset base in eastern Kentucky.
Historically, eastern Kentucky has been heavily drilled with a great deal of success. Eastern Kentucky lies within the Appalachian basin, an area that has often been defined as the most drilled but least explored in the US. It is estimated that 80% of the energy reserves within the Appalachian basin still remain to be produced.
In the initial phase of Bluegrass Energy’s plan for eastern Kentucky, the company intends to secure proven reserves in excess of 100 BCFE within the next three years. The company’s plan is built around securing assets within known producing areas that offer opportunities to use historical results as a guideline. The other part of Bluegrass Energy’s plan is to use advanced oil recovery technologies to optimize reserve recovery.
A key criterion for Bluegrass Energy in selecting leases is the proximity of natural gas pipelines. In the past, companies drilling for oil in this area would commonly find natural gas. At the time, there was a lack of natural gas pipelines in eastern Kentucky, so the wells were abandoned or declared to be dry holes since they had no way to market the gas. That is no longer the case and the company will explore for both oil and gas.
Bluegrass Energy has commenced to secure leases in Breathitt and Magoffin Counties in eastern Kentucky. The lease areas in both counties have had solid production histories. In fact, the company’s acreage in Breathitt County lies on the eastern edge of the largest producing oil field in the eastern United States – the Big Sinking Oil field.
Bluegrass Energy’s initial acreage purchases in eastern Kentucky will allow the company to secure for its benefit proven reserves in excess of 500,000 barrels of oil and 1.5 billion cubic feet of natural gas. The company is currently evaluating other opportunities in eastern Kentucky in order to reach its objective of owning 100 BCFE of proven reserves within the next three years.
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Timing in the oil and gas game is pretty much the real key. A company just needs to be in the right place with the capacity to get the oil and gas out of the ground as prices move up. Too soon and a company is left carrying debt. Too late and it fails to maximize profit. Get the timing just right and profit floods in. It’s certainly isn’t a scenario for the faint of heart but one that can be lucrative if the timing is just right.
Bluegrass Energy Inc., a development stage oil and gas company, works to acquire, develop and exploit oil and natural gas deposits primarily in the Appalachian basin of Kentucky. The company has recently signed a letter of intent for a $1.5 million private placement.
The general purposes of the company’s private placement are directed toward acquisition and development of eastern Kentucky gas properties. In acquiring these properties, the company has instituted a criterion where access to existing pipelines and known reserves are present. Generally speaking, past companies have done the research so Bluegrass can take advantage. This is indicated simply because at the time of gas and oil discovery within the basin, there was no access to pipelines for transport to market, causing companies to look elsewhere. In today’s environment, however, the basin has become more developed and is well served by gas pipelines and other transport options. This is where the company finds its advantage. It knows the basin is only 20% developed and also where the most reliable fields are located.
Although the company is still a development stage company and still putting its plan into action, it has acquired several properties where a realistic production target of 1 BCFE over three years has been estimated. Given current pricing, oil and gas are sitting at a cross roads. The nature of commodity pricing, however, does seem to indicate that there is potential if the company can put its infrastructure together in short order. From all indications, the company’s timing may actually be fairly right on target, as also evidenced by its price. The private placement was carried out for 3 million shares at $0.50 with yesterday’s close at $0.80. There is still work to be done but Bluegrass Energy Corp. does look to be on its way.
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Bluegrass Energy Inc. (BLUG.OB) is a development stage oil and gas development and exploration company with plans to grow through strategic prospects, industry partners and targeted joint ventures. The company yesterday updated the investment community on its recent acquisitions and Kentucky joint venture, sending shares up 6 percent in yesterday’s trading.
In the press release, Bluegrass said that it believes the reserves in Eastern Kentucky are potentially more than previously announced. The company said it has adhered to the restructuring terms of the agreement for the acquisition, and that it will not issue any shares as part of the transaction, saving the company more than $240,000 (based on the closing price of its stock yesterday).
Bluegrass also said it has launched evaluation efforts on the drilling locations for the acreage and expects the transaction to close on or before mid April of 2009.
Last month the company announced a joint venture that would allow it to develop 5,000 acres in the New Albany Shale. Earlier this week, Bluegrass announced its 10th consecutive commercially successful well relative to the acreage of the joint venture. Bluegrass is currently taking steps to commence exploration for potential drilling locations and is finalizing negotiations and schedules to complete the work on the wells.
The company also announced it is negotiating with another company regarding an additional joint venture in Eastern Kentucky. This venture would allow Bluegrass to participate in operations in the largest oilfield in the eastern United States, the Big Sinking Oil Field.
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Bluegrass Energy Inc., an oil and gas development and exploration company, is focused on growing through internally generated and developed prospects, participation with industry partners in oil and gas exploration, and in targeted joint ventures. The company’s objective is to identify and then develop oil and gas properties that have low geological risk.
The strategy used by Bluegrass is built around securing assets within known producing areas that offer opportunities to use historical results as a guideline, but allow the leveraging of today’s science and technology to optimize reserve recovery. The company’s initial acreage purchase will allow it to secure over 500,000 Bbls of oil and 1.5 Bcf of natural gas in proven reserves.
The company has begun securing leases in Breathitt and Magoffin Counties in Kentucky. Historically, both counties have had solid production histories. The acreage held by Bluegrass in Breathitt County lies on the Eastern edge of the largest producing oil field in the Eastern Unites States, the Big Sinking Oil field. To date, the oil field has produced more than 120 million barrels of oil.
The acreage being secured in Magoffin County, Kentucky holds the opportunity to produce both natural gas and oil. Two different public utilities have already laid pipelines to the areas of BEI’s leasehold positions. Within the company’s targeted areas, oil and natural gas have been produced from the Big Lime, the 3 known lenses of the Weir, the 3 different zones of the Coniferous, the Devonian Shale, and the Black River.
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