Gateway Resources U.S.A., Inc.
14 September 2008
It seems the past year has been quite a struggle just to stay ahead of the obligations of maintaining 11 producing leases and attempting to add two more leases to the list. As oil prices increased so did my mandatory obligations to land owners and government agencies. And it has been quite a struggle to do all of that and finish what we started by drilling 6 additional wells on the Khan Lease.
It goes without saying my objective for the corporate year 08-09 has to be to complete these projects and increase our production, and decrease our obligations to government and land owners. Obviously the falling oil price is not going to help get things done. But so far if I just keep working and using my time and assets well, most of the other issues work out.
I estimate that we could double our production if we could just get more wells going on the leases that we own. That is easier said than done, because each opportunity to increase wells has an opposing reason as to why the wells have not been producing so far. Most of the time it is the lack of our ability to handle the produced water. Other times it is just a matter of getting the time to fix electric or other issues with the well. But we can improve the company without requiring a huge investment in buying new leases.
However could I master the problems stated above, there is still an opportunity to acquire new non productive leases and bring them on production. The delicate balance required included maintaining the proper mixture of staff, equipment and money. From one year ago we had James, Heidi and myself working for us. This year we have added Dale, Marty (Temporarily until December) and Calvin (Contract worker). Oh, it would be so much easier if we could keep the same regime of oil and gas prices, but it does seem like that one is in the cards.
One thing I learned last year is the power of continuing working even though the odds seem impossible and everything is stacked against you. As I looked back at what we accomplished from last November until now it is remarkable. But it is not over, nor is there any time to waste. I still have government obligations to meet, grumpy land owners to please, field projects to accomplish and a never ending stream of paperwork to tackle. So there it is: just keep working and hope the work bears fruit.
In the near term I expect us to re-establish production on the Anderson B and Drummer leases. I hope to increase gas production on the Khan Lease to 100 MCFPD. I plan on further expanding our production on the Bryant, Anderson A, Holland, Sanders and Scovel leases. Obviously lower oil and gas prices will interfere with any of those plans.