TIDMCAZA
RNS Number : 6510W
Caza Oil & Gas, Inc.
02 February 2012
February 2, 2012
Caza Oil & Gas, Inc.
CAZA OIL & GAS PROVIDES OPERATIONAL UPDATE
HOUSTON, TEXAS (Marketwire - February 2, 2012) - Caza Oil &
Gas, Inc. ("Caza" or the "Company") (TSX:CAZ) (AIM:CAZA), the
exploration, appraisal, development and production company, is
pleased to provide an operational update.
Hite Offset Property, Caza McMillan #1, Wharton County, Texas.
As previously announced, re-entry operations on the Caza McMillan
#1 well to test the Yegua 9,650 sand have been successful. The well
has been placed online, all frac fluids have been recovered and
production rates are being maintained at 1.13 million cubic feet of
natural gas, 45 barrels of oil and 14 barrels of water per day on a
12/64th choke. After performing a detailed reservoir study, the
well is producing as modeled, and management believes the current
rates represent the most efficient and effective production rates
for the Yegua 9,650 reservoir.
Caza currently has a 42.53% working interest and a 31.05% net
revenue interest in the Caza McMillan #1 well.
San Jacinto Property, Midland County, Texas. As previously
announced, the Caza Elkins 3401 and 3402 wells have been
successfully completed and placed into production. The wells have
combined to produce approximately 15,000 barrels of oil and 23
million cubic feet of natural gas since August 2011.
Caza did not include the Spraberry Formation in the original
completion of the 3401 well and has scheduled to perforate and
stimulate the Spraberry interval on February 3rd, 2012. Management
is very pleased with the performance of the wells and expects the
additional Spraberry interval to contribute reserves and increase
production on the property. The Spraberry stimulation is the last
phase of Caza's engineering evaluation and completion/commingling
of each pay zone in these wells. Although the operations took some
time, management believes they have added value to the cash flow,
reserves and future development/exploitation of the property. Caza
has five additional proven undeveloped locations on the San Jacinto
property.
Caza currently has an 85% working interest in the Caza Elkins
3401 well with a 63.75% net revenue interest. In all subsequent
wells on the San Jacinto property, including the Caza Elkins 3402
well, Caza will have a 75% working interest and a 56.25% net
revenue interest.
Lynch Property, Mud Slide Slim 15 Federal #1 Well, Lea County,
New Mexico. The Mud Slide Slim 15 Federal #1 well on Caza's Lynch
Property was completed in July 2008, as a 13,513 foot vertical
Morrow gas well and has remained on production since then.
Potential pay zones behind pipe in the well included: Delaware,
Avalon Shale, and 1st and 3rd Bone Spring Sands.
Horizontal drilling activity in the general vicinity of the well
in the emerging Bone Spring horizontal oil play has been increasing
steadily over the last eighteen months. The Bone Spring Formation
contains several pay zones from approximately 8,000-11,000 feet
including the Avalon Shale and 1st, 2nd and 3rd Bone Spring Sands,
which are oil and liquids-rich. Successful results in this play
have caused an increase in leasing at the State and Federal lease
sales in New Mexico. The majority of activity in the Bone Spring
horizontal play has been driven by large independent producers such
as Concho Resources, Cimarex Energy, Devon Energy, Yates Petroleum
Corporation and Chesapeake Energy Corporation. As of October 2011,
the top fifty producing horizontal wells in the Bone Spring
Formation in Lea and Eddy Counties, New Mexico, averaged a maximum,
one month rate of 758 barrels of oil equivalent per day. The
average, six month cumulative production rate, using the same fifty
wells through October 2011, was 79,230 barrels of oil
equivalent.
As a result of this successful horizontal activity in the Bone
Spring, Caza recently conducted extensive stimulation and
production tests on each of the Bone Spring zones in the Mud Slide
Slim well. The tests have shown each zone of interest, the Avalon
Shale and 1st and 3rd Bone Spring Sands, to be commercially
productive and therefore viable horizontal targets. Caza has now
comingled the zones mentioned above and is pleased to announce that
the well has produced at a peak daily rate of 159 barrels of oil
per day and is currently producing 73 barrels of oil per day using
a pumping unit. Caza's Lynch Property leases comprise approximately
320 gross acres.
Caza currently has a 40% working interest and a 32% net revenue
interest in the property and the well.
Caza's Fourth Quarter 2011 Average Net Daily Production. Based
on Company gauge reports, Caza's unaudited Fourth Quarter 2011,
average, net, daily production increased from Third Quarter 2011
figures to 277 barrels of oil equivalent per day. Based on actual
Third Quarter sales, Caza's Third Quarter 2011, average, net, daily
production was 233 barrels of oil equivalent per day. This
represents a quarter-to-quarter increase of approximately 19%.
W. Michael Ford, Chief Executive Officer commented:
"I am very pleased with the progress the Company continues to
make. Caza's net production continues to climb as our wells clean
up following the completions executed late last year. The recent
re-completion of the Mud Slide Slim well in the Bone Spring
Formation has further improved our production profile at a
relatively low cost to the Company. More importantly, we are very
excited about the Bone Spring Formation and the potential for
further horizontal drilling within our lease blocks. We are
currently evaluating the production potential of the Bone Spring
horizontal play and how it might impact our current New Mexico
acreage position. This may also impact our 2012 drill plan when
evaluated against the rest of our prospect/property inventory. Caza
intends to target these oil and liquids-rich opportunities within
our inventory, while continuing to assess the most effective way to
increase reserves, production and long term value for
shareholders."
About Caza
Caza is engaged in the acquisition, exploration, development and
production of hydrocarbons in the following regions of the United
States of America through its subsidiary, Caza Petroleum, Inc.:
Texas and Louisiana Gulf Coast (on-shore), and the Permian Basin
(West Texas and Southeast New Mexico).
For further information, please contact:
Caza Oil & Gas, Inc.
Michael Ford, CEO +1 432 682 7424
John McGoldrick, Chairman +1 832 573 1914/+44 7796 861 892
Cenkos Securities plc
Jon Fitzpatrick +44 20 7397 8900 (London)
Beth McKiernan +44 131 220 6939 (Edinburgh)
M:Communications
Patrick d'Ancona +44 20 7920 2330 (London)
Chris McMahon
The Toronto Stock Exchange has neither approved nor disapproved
the information contained herein.
In accordance with AIM Rules - Guidance Note for Mining, Oil and
Gas Companies, the information contained in this announcement has
been reviewed and approved by Anthony B. Sam, Vice President
Operations of Caza who is a Petroleum Engineer and a member of The
Society of Petroleum Engineers.
ADVISORY STATEMENT
Information in this news release that is not current or
historical factual information may constitute forward-looking
statements within the meaning of securities laws. Such information
is often, but not always, identified by the use of words such as
"seek", "anticipate", "plan", "continue", "estimate", "expect",
"may", "will", "project", "predict", "potential", "targeting",
"intend", "could", "might", "should", "believe", "strongly", and
similar expressions. Information regarding future operations and
results relating to the Caza McMillan #1 well, the Yegua formation,
the Caza Elkins 3401 and 3402 wells, the Spraberry Formation, the
Mud Slide Slim 15 Federal #1 well, Bone Spring Formation, Avalon
Shale and 1st, 2nd and 3rd Bone Spring Sands, reserves and revenue
increases and the costs and risks associated therewith, and other
information relating to future production activities or operations
contained in this news release constitutes forward-looking
information within the meaning of securities laws.
Implicit in this information are assumptions regarding: the
technical and commercial viability of the Caza McMillan #1 well,
the Caza Elkins 3401 and 3402 wells, the Mud Slide Slim 15 Federal
#1 well, the timing and results of production operations, projected
revenue and expenses and well performance. Specifically, the
Company has assumed that the wells and/or activities will produce
positive results. These assumptions, although considered reasonable
by the Company, may prove to be incorrect. Readers are cautioned
that actual future operations, operating results and economic
performance of the Company are subject to a number of risks and
uncertainties, including operating and drilling risks and general
economic, market and business condition risk and actual results
could differ materially from a conclusion, forecast or projection
in the forward-looking information. In addition, the geotechnical
analysis and engineering to be conducted in respect of the wells is
not complete. Future flow rates from the wells may vary, perhaps
materially, and the wells may prove to be technically or
economically unviable. Any future flow rates will be subject to the
risks and uncertainties set out herein.
Information regarding historical production from the Bone Spring
Formation by third party wells was obtained from drillinginfo and
is good through October 2011. Such source is independent and the
information may not have been prepared in accordance with the
Canadian Oil and Gas Evaluation Handbook. Such information has been
provided for information purposes only. Actual production from the
Company's wells located in the Bone Spring Formation may differ
materially and readers should not assume that production from the
Company's wells will be consistent with the historical production
experienced by third parties as disclosed in this press
release.
For more exhaustive information on these risks and uncertainties
you should refer to the Company's most recently filed annual
information form which is available at www.sedar.com and the
Company's website at www.cazapetro.com. You should not place undue
importance on forward-looking information and should not rely upon
this information as of any other date. While we may elect to, we
are under no obligation and do not undertake to update this
information at any particular time except as may be required by
securities laws.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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