Business & Finance
Business and Finance
Business and Finance 
Thu, October 29, 2009
Wed, October 28, 2009
AXcess News: Natural Gas Companies Gear Up for Higher Prices
NEW YORK, NY--(Marketwire - October 28, 2009) - Shallow gas exploration and production companies in Alberta are gearing up for higher prices. Anderson Energy (TSX: [ AXL ]) looks for strong improvement in the fourth quarter and Edge Resources (TSX-V: [ EDE ]) (
Anderson Energy's President Brian Dau told AXcess News in a telephone interview earlier this week that AXL looks for its third quarter revenue to "remain depressed" thanks to gas prices hitting a five-year low during the period. But Dau was quite optimistic towards Anderson Energy's fourth quarter results with gas prices having rebound. Anderson had reported a more-than 60% drop in second quarter revenue on August 13, 2009.
Edge Resources released news that it signed a letter of intent with a major Canadian exploration and production company after the closing bell on Wednesday that would expand its land holdings 64%. EDE, like Anderson, is a shallow well E&P company concentrating in the same Alberta area.
EDE President Brad Nichols had given advance notice that his Company would be making significant headway in expanding its land holdings in a September 28, 2009 release where Nichols said, "We are excited about taking the Company to the next phase... as we are able to pursue opportunities that many other firms cannot."
While Edge did not disclose who the "major E&P" company was in Wednesday's news, the Company had managed to convince a major company to place its confidence in Nichols' EDE at a time when gas prices where at a five year low. Nichols had noted in the Company's late September release that Edge was 'debt free', but two weeks earlier in a 501-101 reserve report released on September 14, 2009, Nichols had stated, "In less than four months, during one of the worst market cycles in a decade, the Company has created more than $12 million in value with less than $3 million of capital."
In commenting on today's news, Edge Resources' President said, "In line with our strategy of targeting the most prospective Edmonton Sands properties, we are pleased to have an opportunity to earn these specific sections." The seven sections adjacent to the existing Edge lands are within the Wilson Creek area of Alberta and known for their high production potential. But the deal calls for Edge to drill one well on each section in order to earn 100% of the Farmer's working interest in each respective section, which will require additional capital. Edge announced the completion of a $500,000 private placement on October 14th and while the cash will go a long way towards Edge earning its 100% working interest, additional capital will be needed. Still, the fact that Edge cut a deal with a Canadian 'major E&P,' raising more cash because of it may be easier to accomplish for Nichols' Company.
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