Rancher Energy Corp. (RNCH.OB) Receives Critical Approvals, Adds the “Big Muddy” to its Potentially Profitable Well SitesWednesday, August 20th, 2008
As smaller oil and gas exploration companies enter the market, older oil and gas leases are getting snapped up. Often these companies make the prospects of profit sound like a gusher is going to come spewing forth at the drop of a hat. Unfortunately for them, this is rarely the case. For more experienced oil exploration and development companies, however, the return has already begun with a nice little pond of profit resulting from older wells. If an investor can find a company that has its “ducks in a row” and is producing oil, they can likely enjoy a flow of profits as reworked wells spring to life once again.
Rancher Energy Corp., an oil and gas exploration and development company, reworks older, proven oil fields through more innovative extraction and exploration techniques. The company operates primarily in the Powder River Basin in the southwest corner of Wyoming.
Although there are many oil exploration and development companies working to extract “left behind” oil in the US, most are currently in the lease acquisition phase of the process. Rancher Energy is now past this stage and extracting the “left behind” oil from its wells. The last two years has found the company producing approximately 16,000 barrels of oil per year and reaping the rewards. Its current efforts are also finding solid successes from the Wyoming Oil & Gas Conservation Commission, with their granting of approvals to work the company’s Big Muddy project. Now that this project has received its critical approvals, the company can seek appropriate financing to rework the site and add additional barrels of oil to its selling base.
In many respects, the company’s larger issues don’t revolve around the extraction of remaining oil, but rather around reducing and streamlining the operation’s administrative costs. The company is producing oil, along with contracts with companies such as ExxonMobile for CO2 extraction, but has found that its overhead is limiting potential. Success, it seems, breeds a whole new set of issues. The company has since reduced headcount and is adding new systems to better manage its successes, but more is likely needed as a new growth phase begins.
There are worse issues to deal with, but at present the company has yet to find them. Company management felt comfortable when oil prices were at $59 per barrel and is now enjoying the varying oil prices of around $117. As the company moves forward, it is likely that investors in the company’s new Big Muddy project may just be ready to roll around in their own little lake of muddy profit.
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