Exploration & Processing - Winter 2011 - (Page 16)
GALLEON ENERGY INC.
BY RUSS GAGER
GALLEON ENERGY INC. PRODUCES OIL AND NATURAL GAS, SO WHEN THE PRICE OF ONE IS LOW, THE COMPANY CAN CONCENTRATE ON THE OTHER ONE.
KEEPING COSTS LOW
Galleon says much of its strength lies in its land position – the company has more than 810,000 acres of land in its possession, giving it the ability to be aggressive with its drilling strategy throughout Alberta’s Peace River Arch.
Galleon Energy Inc. www.galleonenergy.com Market capitalization: $300 million HQ: Calgary Employees: 60 Specialty: Oil and natural gas Jim Iverson, vice president of exploration: “Our message is
ow-cost production and projects with size and scalability have allowed Galleon Energy Inc. to keep moving forward in a challenging price environment for natural gas and oil, maintains Jim Iverson, vice president of exploration. Galleon has continued to be an aggressive driller and has amassed the largest contiguous land block ever assembled on Alberta’s Peace River Arch. “One of our initial premises for the company was to get a great land position in a multizone fairway,” Iverson notes. “’We still have that – over 810,000 net acres of land.” This strength in land has allowed Galleon to be an aggressive driller over its seven years of existence and allows the company to point to a drilling inventory of more than 700 locations. Organically generated projects have grown the company’s reserve base to more than 50 million barrels of oil equivalent (BOE) proved plus probable reserves of which 60 percent is currently gas and 40 percent is oil. The company’s current production is greater than 14,000 BOEs and is split 70:30 gas to oil. “Galleon is fortunate to be able to shift focus from gas to oil,” Iverson explains. “Many companies in Alberta can’t do that, so they are stuck struggling with the current low gas prices.” At press time, the natural gas price in Alberta was in the range of $3.50 Canadian per thousand cubic feet (cdn/mcf), a far cry from the high of $13.50 cdn/mcf in December 2005 and even the $11 cdn/mcf in May 2008 Global Petroleum Marketing. “Galleon is going to focus on its oil properties in the near term,” Iverson points out. “You’re going to see a lot more oil production from Galleon as we move forward. About 72 percent of the 2010 drilling budget is weighted toward drilling oil.” Oil prices rose to $145 a barrel in July 2008 and then plunged to $36 a barrel in January 2009, according to the TFC commodity charts for NYMEX crude oil. They have since stabilized around $75 a barrel. “People think that’s a good price because the suppliers can find it for that price and still make a profit and yet it doesn’t stifle the economy,” Iverson notes. Low Operating Cost Although oil is the commodity of choice currently, Galleon is also fortunate to have some high netback gas projects. Its two top gas projects which represent approxWINTER 2011
Photo courtesy of Galleon Energy Inc ©2010
production and exploration
just really that we are sort of rejuvenating ourselves.”
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Table of Contents for the Digital Edition of Exploration & Processing - Winter 2011
Exploration & Processing - Winter 2011
A Natural Solution
After the Fallout
Uranium on the Rise
Galleon Energy Inc.
Gibraltar Mines Ltd.
The Municipal Group of Companies
Selwyn Resources Ltd.
Redmond Minerals Inc.
Copper Fox Metals
OFM Pump Inc.
Sunshine Oilsands Ltd.
Pacific Rubiales Energy Co.
Thermo Design Engineering
Alexco Resource Corp.
North American Palladium
Mammoet Canada Eastern Ltd.
Industrial Equipment Manufacturing Ltd.
Guyana Goldfields Inc.
Flotek Industries Inc.
Dominion Terminal Associates
Compressor and Engine Service LLC
BEHR Energy Services Ltd.
LoneStar Energy Fabrication
American Oil & Gas – The Goliath Project
Alberta Oilsands Inc.
Southern Petroleum Laboratories Inc.
Cochrane Technologies Inc.
Crystal Flash Energy
Energold Drilling Corp.
Esperanza Resources Corp.
Explorator Resources Inc.
Rush Sales Co.
Kimber Resources Inc.
Nelson Bros. Oilfield (1997) Services Ltd.
Gulf Copper and Manufacturing
Exploration & Processing - Winter 2011