JED Oil Inc suspends drilling in Pinedale area
Fall in natural gas prices cited as reason
October 10, 2006
JED Oil Inc, an oil and natural gas company based out of Calgary, Alberta, Canada, announced on October 10 that they have suspended further drilling in the Pinedale area as a result of the significant decline in natural gas prices. They said drilling would be suspended until production testing with the isolation assembly and, ultimately, production with a final isolation assembly have been completed.
JED Oil develops and operates oil and natural gas properties principally in western Canada and in the United States. The company began operations in the second quarter of 2004.
According to the company’s news release Tuesday, October 10, they encountered unexpected water production during initial flowback of the first well drilled in Pinedale on August 31. They are investigating the problem. Drilling and fracture stimulation of the second well in the Pinedale area have been completed.
"Clearly we are disappointed with the unexpected water production we are currently experiencing in the Pinedale wells," stated Tom Jacobsen, JED's CEO. "We will continue to work diligently to isolate the water production while maximizing the gas production."
"As a result of the challenges we have encountered in Pinedale and postponing our natural gas drilling, we now expect to exit this year at a production rate similar to our third quarter exit rate" added Al Williams, JED's President. "As most of our gas wells produce at their peak rates immediately following drilling, we will be revamping our budget to return to our natural gas drilling later this year or early next year when the price of natural gas is expected to increase during the heating season."
After the announcement on Tuesday, stock for the company lost more than half their market value and fell to an all-time low, falling $5.47 to close at $5.30 on the American Stock Exchange on October 10, according to Reuters.
JED Oil Inc, www.jedoil.com