"The picture above shows three operators with acreage surrounding the Nemaha Ridge. The companies will continue to drill and complete wells in the Chat, and are good ways to follow development of this source rock. Current expectations are for better production with a higher oil cut. Other exploration and production companies are also in the area such as Austex (ATXDF.PK) and Evolution (EPM). It could take the better part of 2013 to understand how Chat wells will model when compared to the Lime. Early results indicate it is much better, and will produce IRRs that compete with many of the better plays in the United States. Keep in mind we are real early in the development of this area, and a few bad completions could hurt the value of this acreage."
"Range Resources (RRC) may be the best way to play the Chat. Its acreage is located in Kay and Noble counties. This is near the Nemaha Uplift and is prospective both the Mississippi Chat and Lime. The Chat has a combination of better porosity and oil cuts. This acreage is now considered to be the best in the play. Range's Mississippian development has provided good results."
AOK Price at posting:
13.5¢ Sentiment: LT Buy Disclosure: Held
