How does a micro-cap company move from being a dry-gas producer in the Haynesville to having 65% to 75% of its production oil-related by the end of 2012? One way is with a 10,281-foot lateral drilled into the Three Forks formation in North Dakota that will be tapped with a 41-stage hydraulic fracturing operation. The lateral runs under two sections -- 1,280 acres – in an odd-shaped, odd-sized spacing unit, Alan Van Horn, manager, investor relations, GMX Resources, told E&P On-Line. The Wock #21-1-1H well in Stark County runs almost as far horizontally as it does vertically. Total measured depth of the well is 21,151 feet. “We’re not cutting any corners,” Van Horn emphasized. “This is our first effort in the basin, and it is not a short lateral. We could have gone further. Even then, it is 700 to 800 feet longer than you normally see. We are clearly on the upper end of the scale.” What attracted my attention was the length of the lateral. That lateral is nearly two miles long and could go through two or three sections. It doesn’t, but it does show how much the industry has changed in recent years. The Halliburton Rapid Frac™ sliding-sleeve system will be used for the frac stimulation, which is scheduled to begin the week of Sept. 26. Oil production should begin by Oct. 1. “In our view, the sliding sleeve will provide better production cheaper and faster with less risk involved,” he continued. And that’s just the beginning of the company’s efforts. GMX will spud its second Three Forks well (the Frank #34-4-1H), also in Stark County around Sept. 1. Permits are pending for the Evoniuk #21-2-1H in Billings County and the Akovenko #24-34-1H in McKenzie County. The Evoniuk well is set to spud in October, followed by the Akovenko well in November. GMX has 35,000 lease acres in North Dakota and Montana. “We like the area. We believe we are in the heart of the fairway,” he noted. The company has a resource potential of 2.2 trillion cubic feet of gas and 103 million barrels of oil in proved and probable reserves. The company is also participating in two other non-operated Bakken/Three Forks wells in North Dakota along with a Niobrara well in Wyoming. Two years ago, Oklahoma City-based GMX Resources was a dry-gas producer with all of its eggs in the Haynesville basket. Gas prices were dropping and drilling incentives were declining along with the prices. “We needed to seek out opportunities to diversify the company,” Van Horn explained. “We needed to deploy our capital in resource plays that give more diversification. It would require several catalysts for gas prices to improve – industrial demand recovers, more coal-to-gas switching of power plants and the administration adopting an energy policy.” Until then, activity in the Haynesville has been put on hold and the company is moving into new plays. At the end of 2010, three different opportunities showed up on its doorstep, he said. The company executives have been in the oil business for many years. They have lots of relationships and contacts in the energy industry. They talked to people they knew, found bankers willing to invest in their efforts and raised more than $300 million in capital. “We looked at lots and lots of opportunities. That has resulted in the company going from producing only dry gas two years ago to being in position to have 65% to 75% of its production be oil by the end of 2012,” he added. The company is also preparing for a seismic shoot in the Chugwater, Wyoming, area that should be permitted and completed by December. It will cover about 30,000 net acres out of the company’s 40,000-net-acre position in the Niobrara. And, the company hasn’t completely given up on its Haynesville position. GMX has initiated a 3D seismic shoot, called Crossroads, covering the core of its acreage in Harrison County, Texas. Recording is expected to start in mid-September with processing to begin in mid-October. The Crossroads shoot covers 33 square miles and will assist the company in identifying additional oil targets in the Glen Rose and Travis Peak formations and potentially below the Haynesville/Bossier gas shale. The seismic could also provide a more complete understanding of the joint and fracture system of its horizontal development of the gas shale and Cotton Valley Sands formation. The wildcat mentality remains alive and well in the oil and gas industry.