RE's Excellent Options

GORDON CURRIE, Salman Partners (08/17/2010)
"Rock Energy reported an 11% YOY increase in production (to 3,720 boed in the second quarter). . .Lots of junior producers would envy Rock Energy's options. With heavy oil-oriented properties in the Lloydminster area—along the Alberta/Saskatchewan border—and natural gas-oriented properties in the Elmworth area of Alberta, Rock can choose where to deploy its capital. Given the disparity between oil and gas prices, there is no surprise that it favored heavy oil in Q2, drilling eight wells at 100% working interests.

Rock's production has traditionally been split roughly 50/50 between oil and gas, but that ratio had crept up to two-thirds oil in Q2, as commodity prices dictated diverting more capital to oil projects. The company does have a Montney gas discovery at Elmworth that it will follow-up with in H2."

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