Pinnacle Gas Resources Inc. (PINN, Financial) filed Amended Annual Report for the period ended 2008-12-31.
PINNACLE GAS RESOURCES, INC. is an independent energy company engaged in the acquisition, exploration and development of domestic onshore natural gas reserves, primarily located in the Rocky Mountain region. The Company focuses on the development of coalbed methane properties located in the Rocky Mountain region, and is a holder of CBM acreage in the Powder River Basin. Pinnacle owns almost all of the rights to develop conventional and unconventional oil and gas in zones below its existing CBM reserves. The Company's undeveloped acreage is located on the northern end of the Powder River Basin in northeastern Wyoming and southern Montana. Pinnacle Gas Resources Inc. has a market cap of $9.7 million; its shares were traded at around $0.325 with and P/S ratio of 0.4.
We had a total capital expenditure budget of $30.1 million for 2008 and expected to drill 146 gross (110 net) wells during the period. However, due to low CIG index prices, the economic climate and limited capital resources, we reduced our 2008 capital expenditure budget resulting in actual 2008 capital expenditures of $27.8 million. In connection with our reduced capital expenditure budget, we also reduced our drilling and completion targets for 2008. We curtailed substantially all new drilling in the fourth quarter of 2008, and we have shut-in a number of wells that are not economic at current natural gas price levels. If natural gas prices remain low, we expect to continue to operate with a reduced capital expenditure plan. Under our reduced capital expenditure plan, we would generally make such expenditures only as necessary to secure drilling permits in strategic areas, drill wells that secure leasehold positions and construct the necessary infrastructure to complete and hook-up wells that have already been drilled. Our capital expenditure budget for 2009 will be dependent upon CIG index prices, our cash flows and the availability of additional capital resources.
In April 2006, we completed a private offering of 12,835,230 shares of our common stock to qualified institutional buyers, non-U.S. persons and accredited investors. Immediately prior to the initial closing of our private placement, DLJ Merchant Banking exchanged all of their warrants for 6,894,380 shares of common stock in a tax-free reorganization and each of Carrizo and U.S. Energy entered into a cashless exercise of all of their options for 584,102 shares of common stock, in each case based on the private placement price of $11.00 per share. Following the initial closing of our private placement, we redeemed all of the outstanding shares of Series A Redeemable Preferred Stock held by DLJ Merchant Banking with a portion of the proceeds we received in the private placement. In addition, following the final closing of our private placement, we used a portion of the proceeds we received in the private placement to repurchase an aggregate of 1,587,598 shares of common stock from DLJ Merchant Banking at a price per share equal to the private placement price of $11.00 per share less the initial purchasers discount and placement fee. On September 22, 2006, DLJ Merchant Banking purchased all of the 2,459,102 shares of our common stock held by U.S. Energy and its affiliates in a private transaction.
We had a total capital expenditure budget of $30.1 million for 2008 and expected to drill 146 gross (110 net) wells during that period. However, due to low CIG index prices, the economic climate and limited capital resources, we reduced our 2008 capital expenditure budget resulting in actual 2008 capital expenditures of $27.8 million. In connection with our reduced capital expenditure budget, we also reduced our drilling and completion targets for 2008. During the year ended December 31, 2008, we drilled 117 gross (82) net wells. We curtailed substantially all new drilling in the fourth quarter of 2008, and we have shut-in a number of wells that are not economic at current natural gas price levels. If natural gas prices remain low, we expect to continue to operate with a reduced capital expenditure plan. Under our reduced capital expenditure plan, we would generally make such expenditures only as necessary to secure drilling permits in strategic areas, drill wells that secure leasehold positions and construct the necessary infrastructure to complete and hook-up wells that have already been drilled. The CIG index price has been extremely volatile during 2007 and 2008 and at times reached unusually low levels. For instance, the CIG monthly index price per Mcf was $1.78, $3.41, $2.78 and $4.63 for delivery in September, October, November and December of 2008, respectively. If prices remain low, our cash flows from operations will decrease and the borrowing base and borrowing availability under our credit facility could be further reduced. If we do not have sufficient cash flows and cannot obtain capital through our credit facility or otherwise, our ability to execute our development and acquisition plans, replace our reserves and maintain production levels could be greatly limited. If natural gas prices do not improve, we will consider alternatives to increase liquidity, including asset sales and issuances of equity. Our capital expenditure budget for 2009 will be dependent upon CIG index prices, our cash flows and the availability of additional capital resources. For a discussion of our credit facility and other matters that may limit our ability to execute our 2009 capital expenditure plan, please see Managements Discussion and Analysis of Financial Condition and Results of OperationsLiquidityCredit Facility.
We include water gathering and water disposal costs in our hook-up, infrastructure and water management cost estimate of between $62,000 and $109,000 per well depending on the location and the number of wells drilled on an 80-acre spacing unit.
Read the The complete Report
PINNACLE GAS RESOURCES, INC. is an independent energy company engaged in the acquisition, exploration and development of domestic onshore natural gas reserves, primarily located in the Rocky Mountain region. The Company focuses on the development of coalbed methane properties located in the Rocky Mountain region, and is a holder of CBM acreage in the Powder River Basin. Pinnacle owns almost all of the rights to develop conventional and unconventional oil and gas in zones below its existing CBM reserves. The Company's undeveloped acreage is located on the northern end of the Powder River Basin in northeastern Wyoming and southern Montana. Pinnacle Gas Resources Inc. has a market cap of $9.7 million; its shares were traded at around $0.325 with and P/S ratio of 0.4.
Highlight of Business Operations:
The aggregate market value of the registrants common stock held by non-affiliates of the registrant was approximately $68,107,043 as of June 30, 2008 (based on a closing price of $3.60 per share and excluding 10,081,478 shares held by affiliates).We had a total capital expenditure budget of $30.1 million for 2008 and expected to drill 146 gross (110 net) wells during the period. However, due to low CIG index prices, the economic climate and limited capital resources, we reduced our 2008 capital expenditure budget resulting in actual 2008 capital expenditures of $27.8 million. In connection with our reduced capital expenditure budget, we also reduced our drilling and completion targets for 2008. We curtailed substantially all new drilling in the fourth quarter of 2008, and we have shut-in a number of wells that are not economic at current natural gas price levels. If natural gas prices remain low, we expect to continue to operate with a reduced capital expenditure plan. Under our reduced capital expenditure plan, we would generally make such expenditures only as necessary to secure drilling permits in strategic areas, drill wells that secure leasehold positions and construct the necessary infrastructure to complete and hook-up wells that have already been drilled. Our capital expenditure budget for 2009 will be dependent upon CIG index prices, our cash flows and the availability of additional capital resources.
In April 2006, we completed a private offering of 12,835,230 shares of our common stock to qualified institutional buyers, non-U.S. persons and accredited investors. Immediately prior to the initial closing of our private placement, DLJ Merchant Banking exchanged all of their warrants for 6,894,380 shares of common stock in a tax-free reorganization and each of Carrizo and U.S. Energy entered into a cashless exercise of all of their options for 584,102 shares of common stock, in each case based on the private placement price of $11.00 per share. Following the initial closing of our private placement, we redeemed all of the outstanding shares of Series A Redeemable Preferred Stock held by DLJ Merchant Banking with a portion of the proceeds we received in the private placement. In addition, following the final closing of our private placement, we used a portion of the proceeds we received in the private placement to repurchase an aggregate of 1,587,598 shares of common stock from DLJ Merchant Banking at a price per share equal to the private placement price of $11.00 per share less the initial purchasers discount and placement fee. On September 22, 2006, DLJ Merchant Banking purchased all of the 2,459,102 shares of our common stock held by U.S. Energy and its affiliates in a private transaction.
We had a total capital expenditure budget of $30.1 million for 2008 and expected to drill 146 gross (110 net) wells during that period. However, due to low CIG index prices, the economic climate and limited capital resources, we reduced our 2008 capital expenditure budget resulting in actual 2008 capital expenditures of $27.8 million. In connection with our reduced capital expenditure budget, we also reduced our drilling and completion targets for 2008. During the year ended December 31, 2008, we drilled 117 gross (82) net wells. We curtailed substantially all new drilling in the fourth quarter of 2008, and we have shut-in a number of wells that are not economic at current natural gas price levels. If natural gas prices remain low, we expect to continue to operate with a reduced capital expenditure plan. Under our reduced capital expenditure plan, we would generally make such expenditures only as necessary to secure drilling permits in strategic areas, drill wells that secure leasehold positions and construct the necessary infrastructure to complete and hook-up wells that have already been drilled. The CIG index price has been extremely volatile during 2007 and 2008 and at times reached unusually low levels. For instance, the CIG monthly index price per Mcf was $1.78, $3.41, $2.78 and $4.63 for delivery in September, October, November and December of 2008, respectively. If prices remain low, our cash flows from operations will decrease and the borrowing base and borrowing availability under our credit facility could be further reduced. If we do not have sufficient cash flows and cannot obtain capital through our credit facility or otherwise, our ability to execute our development and acquisition plans, replace our reserves and maintain production levels could be greatly limited. If natural gas prices do not improve, we will consider alternatives to increase liquidity, including asset sales and issuances of equity. Our capital expenditure budget for 2009 will be dependent upon CIG index prices, our cash flows and the availability of additional capital resources. For a discussion of our credit facility and other matters that may limit our ability to execute our 2009 capital expenditure plan, please see Managements Discussion and Analysis of Financial Condition and Results of OperationsLiquidityCredit Facility.
We include water gathering and water disposal costs in our hook-up, infrastructure and water management cost estimate of between $62,000 and $109,000 per well depending on the location and the number of wells drilled on an 80-acre spacing unit.
Read the The complete Report
