[The company] has signed a Letter of Intent to acquire a 70% working interest in 8000 acres on Wilbarger County in Texas. This property has a history of great production and significant reserves. …Given that the company is prone to making wild claims about its potential for profit, I’m skeptical about that last paragraph. However, the acquisition of new land is a promising sing. Given that the company sold off most of its acreage in exchange for stock (in an unknown firm), Pilgrim was beginning to seem more like a mutual fund than an oil company.
The Palo Duro Basin prospect, which is currently being evaluated for further development, has been compared to the Barnett Shale discovery. Barnett Shale is estimated to contain some 30 trillion cubic feet of natural gas. Management believes Palo Duro could prove to be one of the largest natural gas deposits in North America.
The company still has a steady stream of income from the properties it retained, sufficient to cover operating expenses and keep the company in the black while it continues to go wildcatting on uncharted lands, so I’m not overly concerned about them putting all their eggs in one basked. I hope and expect that the Palo Duro property is one of several acquisitions in the coming year.
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