Aspen Exploration Corporation (ASPN)
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a 24-year operating history Aspen Exploration Corporation is very solid, honest, well-run
company with little debt and good existing production and good prospects to drill in the
CEOCFOinterviews: Mr. Cohan, has there been any changes since you took over as CEO of Aspen Exploration?
Mr. Cohan: The company hasnt changed since my becoming CEO and president in the last year. I was president of the West Coast Division with primarily the same duties and functions as I currently have now. I would say it was a relatively seamless transition.
CEOCFOinterviews: What is the focus of Aspen?
Mr. Cohan: Aspen was founded about 24 years ago in February of 1980. We opened up our California office in April of 1995, which is almost nine years ago. Our focus is natural gas exploration in the Sacramento Valley of northern California. We are a very small aggressive and independent producer, looking to grow the company through the drill bit and production acquisitions.
CEOCFOinterviews: What is it about the Sacramento area that makes it a good place to be?
Mr. Cohan: What we like about the Sacramento Valley is that there are multiple producing horizons up there. We currently operate about 37 gas wells and the producing formations range all the way from 2000 feet to about 11,000 feet in depth. Several of the wells could have three or four producing formations in one well. The Sacramento Valley is primarily populated by the smaller independents, which Aspen is. The majors have long since gone and we can typically acquire the leases we need. There is a lot of drilling opportunities for an independent gas producer.
CEOCFOinterviews: You mentioned that you are aggressive; what does that mean for Aspen?
Mr. Cohan: Aspen is a company with two full time employees and a market cap of about five million dollars or so. Most companies our size might drill one or two wells a year, while Aspen is able to drill five or six wells a year in addition to achieving some production acquisitions. For a company our size, that is considered aggressive. We are efficient and well-run and we are able to do quite a bit with a small staff.
CEOCFOinterviews: What is it that you know that others dont?
Mr. Cohan: Due to Aspens reputation of being very honest and able to move quickly, we do see a large deal flow. There is a group of independent geologists and geophysicists who generate the gas prospects. Most of these parties bring the prospects to Aspen because they know that we will give them a quick response. If we take the deal, we will get it drilled, and therefore that is their payday. I dont know what we know that others dont other than we get to see a lot of the deals out there and we are able to act on them quickly. Aspen typically reviews 20-25 prospects for everyone that we drill. We do a lot of research before we drill a well.
CEOCFOinterviews: What factors do you look at when deciding on the right well to drill?
Mr. Cohan: A combination of 3-D seismic and well data. Almost every well we drill has 3-D seismic over it. You want to have a good 3-D seismic response, which is analogous to known productive gas wells with similar 3-D responses, in conjunction with well control in the area. We try to use all of the available data. The other factor we look at is the risk to reward ratio; you need to look at the depth and the cost of the wells and the potential per well reserves. The combination of both science and economics makes the project the right project for Aspen.
CEOCFOinterviews: How does experience and gut feeling play into your decisions?
Mr. Cohan: Gut feeling doesnt play a huge role, but experience does play a large role. We look at every prospect on its own merits but the more experience you have with similar prospects, that always goes into the decision.
CEOCFOinterviews: Will you tell us about the current projects and what is on the horizon?
Mr. Cohan: We recently completed a 10½ square mile 3-D seismic survey in our WEST GRIMES FIELD area in Colusa County. We have 5,000 acres or so leased up there. We should have the results of the seismic in about two months. We are hopeful that there will be numerous high-quality, high reserve drilling locations to drill. Aspens DENVERTON CREEK FIELD, located in Solano County: Aspen extended this field 2 miles to the northeast of the previous field limits in November of 1996 by drilling twelve gas wells out of fifteen attempts for an 80% success ratio. We have produced about 10 BCF (billion cubic feet) of gas so far and have some additional drilling to do there. We just have taken several new quality projects that we will be drilling next year in various counties in the Sacramento Valley."
CEOCFOinterviews: Are there any recent breakthroughs in drilling that helped reduce costs?
Mr. Cohan: What has greatly reduced the cost of drilling in the last five to ten years, has been the PDC bit which is a newer type of drill bit that enables the wells to be drilled faster and therefore cheaper. I would say that is by far the major breakthrough in drilling in the Sacramento Valley.
CEOCFOinterviews: The price of natural gas is cyclical; how does that fit into what you do?
Mr. Cohan: It used to be cyclical before all the gas-fired generated plants were built. You would have low prices in the summer and high prices in the winter. If you look at the nature of gas prices the last couple of years, this isnt the case anymore because in the summer there is also quite a demand for natural gas. I have a chart that I keep on natural gas prices and since about late December of 2002, gas prices have been at or above $4.00 per MMBtu and currently the daily price is about $6.60. I would say prices are much less cyclical and much higher. If you go back a few years, $2.00 - $3.00 gas was the norm; now $3.75 - $6.50 gas is the range.
CEOCFOinterviews: Who are your customers?
Mr. Cohan: We sell our gas to various gas purchasers such as Calpine, ConocoPhillips and ENSERCO. They can take all the gas we produce and it is a good time to be a natural gas producer now.
CEOCFOinterviews: What are your challenges for the future?
Mr. Cohan: For Aspen it would be to continue to find quality drilling prospects and acquisitions so that we can continue to grow the company as we have.
CEOCFOinterviews: How is the company doing financially?
Mr. Cohan: The company is doing fine. We have been profitable the last year or so. We have a very good group of partners that have been with me for years. We have had excellent drilling success so we are able to take on much larger projects. Aspen typically keeps 20-30% of each project and the rest is taken by its partners. Funding for the prospects has not been a problem at all.
CEOCFOinterviews: There are many companies similar to Aspen; why should potential investors be interested?
Mr. Cohan: Aspen has a 24-year operating history; we are very solid, honest, and well respected by our peers (the other oil and gas companies), service companies and the land owners. We pay all of our bills quickly. We are a well-run company with little debt and we have good existing production and good prospects to drill in the future. We are a natural gas producer and natural gas prices are extremely high now with good prices forecast for months and hopefully years to come.
CEOCFOinterviews: Is the 24-year history unusual for your industry?
Mr. Cohan: For a small company such as Aspen that started in the boom of 1980, probably the majority of companies our size are long gone, so we have certainly persevered.
CEOCFOinterviews: What should investors know that perhaps they dont realize when they first look at the company?
Mr. Cohan: I think the public data that we put out accurately describes the company. The share price currently is about eighty-five cents. Aspen has typically put all of its money in its projects. We have not spent much on investor relations. If anything, we are under exposed to the investment community so possibly we are under valued.
CEOCFOinterviews: Are you interested in reaching more of the investment public?
Mr. Cohan: We are starting to consider that as we grow. We feel a company that is as well-run as Aspen with its long operating history is probably of interest to the investment community especially with the high natural gas prices.
CEOCFOinterviews: You have a section on your website about awards, will you tell us what Aspen is recognized for?
Mr. Cohan: We, for the last three years, have won the Outstanding Lease Maintenance Award, which is given out by the California Division of Oil, Gas and Geothermal Resources, to operators like Aspen, that not only meet the requirements of the division, but exceed them. If you look at some of the pictures on the website, you will see that we go the extra mile, not just to install the production facilities, but we groom them and they are attractive looking well sites. That pleases the landowners as well as the division. We have won the Best New Well in the Pacific Region award in 1998 for the Emigh #2-1 well, which is one of our Denverton Creek wells. Other recognition has been that the Oil and Gas Journal, an international publication for the oil and gas business, rated Aspen the number two U.S. Independent Public Oil and Gas Company in 2002. They have access to our financials and I suppose they just gather all of the financials of public companies and rate them based on various parameters, so we are very proud of that.
CEOCFOinterviews: What makes a well best?
Mr. Cohan: They rate it as both the amount of pay in the well, the flow rate, what the well would do to stimulate additional drilling in the area. You have to apply to win and we applied and we won.
CEOCFOinterviews: Are there any environmental issues that we should be talking about?
Mr. Cohan: In California many people have the misconception that it is a tough place to do business. We have to go through the permit process for each county before we drill a well, which takes anywhere from 30-75 days. The various counties look at all the environmental issues but we have not had any problems. We have found it to be a very friendly place to do business as long as you do business properly. If you are a solid company and follow the rules, things seem to go very smoothly. The Division of Oil and Gas is very operator-friendly; I have been very pleased with the engineers and the geologists that work for them.
CEOCFOinterviews: What would you like to say to our readers in closing?
Mr. Cohan: I would
like to mention our website is www.aspenexploration.com and our trading symbol is ASPN on
the OTC bulletin board.
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ASPEN ANNOUNCES MORE GAS DISCOVERIES & TEST RATES
DENVER, COLORADO, July 12, 2004. Aspen Exploration Corporation (OTCBB: ASPN), with offices in Bakersfield, California, and Denver, Colorado, has announced additional successful results from its drilling efforts in the West Grimes Field, Colusa County, California. Aspen has drilled 5 successful gas wells out of 5 attempts in 2004 and anticipates drilling 4 additional wells in the Sacramento Valley gas province of northern California this year.
Posted: 7/12/04 - CEOCFOinterviews.com
Posted: 7/9/04 - CEOCFOinterviews.com
Posted: 7/9/04 - CEOCFOinterviews.com
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