GMX shares spike on oil discovery

AP News
Posted: Apr 04, 2012 12:20 PM
GMX shares spike on oil discovery

Shares of independent oil and gas producer GMX Resources shot up more than 22 percent Wednesday after the company reported strong results from a well in North Dakota.

The Oklahoma City company announced late Tuesday that a well drilled in McKenzie County, North Dakota was producing at a peak rate of 2,549 barrels of oil equivalent per day. That's 50 percent higher rate than a nearby well.

"Our 2012 drilling plan will continue to be focused in this very productive region," company President Michael Rohleder said.

The wells are tied to the Bakken shale formation, a vast underground layer of rock that is rich in oil. The petroleum industry has been aggressively drilling into the formation recently in hopes of tapping new sources of oil.

GMX owns 89 percent of the McKenzie County well.

Company shares rose by 28 cents, or 22.4 percent, to $1.53 in midday trading, reversing a five-week drop. GMX shares are still down 11 percent from a high of $2.16 on Feb. 24.