TIDMCAZA
RNS Number : 7344J
Caza Oil & Gas, Inc.
10 August 2012
August 10, 2012
Caza Oil & Gas, Inc.
CAZA OIL & GAS ANNOUNCES SECOND QUARTER RESULTS
AND PROVIDES OPERATIONAL UPDATE
HOUSTON, TEXAS (Marketwire - August 10, 2012) - Caza Oil &
Gas, Inc. ("Caza" or the "Company") (TSX:CAZ) (AIM:CAZA), is
pleased to provide its unaudited financial and operational results
for the three-months ended June 30, 2012.
Unaudited Second Quarter Financial Results
-- Caza's production increased 38% to 25,107 Boe for the
three-month period ended June 30, 2012, from 18,130 Boe for the
comparative period in 2011. This represents an average daily
production rate increase of 77 Boe/d to 276 Boe/d, as compared to
199 Boe/d for the comparative period.
-- Caza's revenues from oil and gas sales increased 30% to
$1,093,694 for the three-month period ended June 30, 2012, from
$843,836 for the comparative period in 2011. The increase in
revenues was primarily due to additional wells being brought on
line since the comparative period.
-- The average combined price received by Caza decreased 6% to
$43.56 per Boe during the three-month period ended June 30, 2012,
from $46.54 per Boe during the comparative period in 2011, due to
lower commodity prices.
-- Caza's oil and natural gas liquids (NGL) production increased
86% to 9,546 bbls for the three-month period ended June 30, 2012,
from 5,138 bbls for the comparative period in 2011. The Company's
oil and NGL production has increased to 38% of the Company's
combined oil and natural gas production in Q2 2012 from 28% in Q2
2011, further mitigating the low US gas price.
-- Caza had a cash balance of $4,715,163 as of June 30, 2012, as
compared to $8,232,701 at March 31, 2012. Caza's working capital
balance at June 30, 2012, was $4,908,143 as compared to $7,558,545
at March 31, 2012. The decrease in Caza's working capital balance
is due primarily to the investment made to drill the Bradley 29 Fed
Com #3H well in Eddy County, New Mexico, and operational costs
incurred on the Caza Elkins 3401 and 3402 wells in Midland County,
Texas. This cash balance does not include the proceeds of $6.1MM
from the sale of the San Jacinto property, which occurred in Q3
2012, as previously announced.
Second Quarter Operational Results and Recent Events
-- The Bradley "29" Fed Com No. 3H horizontal well reached total
measured depth of approximately 12,690 feet in early June 2012, was
successfully fracture stimulated in the 2(nd) Bone Spring sand on
June 14, 2012, and reached a peak producing rate day of 399 bbls of
oil and 521 Mcfg, which equals 486 Boe, with 488 bbls of water. The
production profile and all costs associated with drilling,
completing and producing this well are as projected and meet the
Company's pre-drill expectations. Caza has a 20% working interest
and a 15% net revenue interest in the Bradley "29" Fed Com No. 3H
well.
-- The Quail "16" State No. 3H horizontal well, operated by
Fasken Oil and Ranch, Ltd. ("Fasken") commenced drilling in April
with a primary horizontal objective in the 3(rd) Bone Spring sand
at a vertical depth of approximately 10,965 feet subsurface. The
well recently reached total measured depth at approximately 14,987
feet. The well had multiple oil and gas shows while drilling in the
Delaware, Avalon Shale, and 1(st) , 2(nd) and 3(rd) Bone Spring
sands. Caza has a 0.25% working interest and an approximate 0.1875%
net revenue interest in the Quail "16" State No. 3H well.
-- The CML Exploration, LLC operated WC 35 State No. 1 well was
perforated in the San Andres interval between 4,814-4,821 feet in
May 2012, and has recently been fracture stimulated. The well has
limited fluid entry and is currently producing on pump at
approximately 3 bbls of fluid per day with 60% oil cut. Caza has a
20% working interest and an approximate 17.125% net revenue
interest in the WC 35 State No. 1 well.
-- The Company recently announced the successful sale of the San
Jacinto property, which includes the Caza Elkins 3401 and 3402
wells. The price received was $6.1MM and exceeded Caza's internal
matrix for return on investment and capital employment. Caza
intends to use the proceeds to further existing assets,
specifically in the Bone Spring play in southeast New Mexico, and
progress other opportunities.
-- Caza is pleased to announce that it has signed a rig contract
to drill the Caza Ridge 14 State #3H horizontal test well on its
Copperline Prospect in Lea County, New Mexico. The well will be
drilled to a total vertical depth of approximately 11,500 feet with
a total measured depth of approximately 15,730 feet. The primary
target is the 3(rd) Bone Spring sand at a vertical depth of
approximately 11,315 feet subsurface. Well site preparation has
already started, and the well is currently scheduled to spud in
mid-August. Caza intends to participate with a 57.5% working
interest and an approximate 45.0% net revenue interest in the Caza
Ridge 14 State #3H well.
W. Michael Ford, Chief Executive Officer commented:
"Caza continued its positive operational and financial
performance in the second quarter of 2012, increasing both
production and revenues."
"The recent sale of the San Jacinto property has opened several
doors for the Company, especially on the exploration front.
Management intends to use a portion of the proceeds to drill the
upcoming test well on our Copperline prospect. This will be Caza's
first Company operated horizontal Bone Spring well. We are also
preparing the drill site at the Company's Forehand Ranch property
in Eddy County, New Mexico for drilling in mid-September 2012."
"While we do not view our participation in the Quail Ridge well
to be material, the well does offset Caza's Lynch property and, if
successful, will help de-risk our acreage as well as provide us
with valuable information for future drilling at Lynch and in the
horizontal Bone Spring play in general. This information along with
our recent success at the Bradley 29 well and positive reports
coming from elsewhere in this oil and liquids-rich play have
management increasingly enthusiastic about drilling the Bone Spring
projects in the Company inventory. In addition to Copperline,
Forehand Ranch, Quail Ridge and Bradley 29, Caza has five other
horizontal Bone Spring prospects under lease including, Lynch,
Lennox, Mad River, Two Mesas and Azotea Mesa. This gives the
Company approximately 4,000 net acres in the play to date. As 2012
operations progress, we look forward to updating the market on the
Company's exploration and production activities."
Copies of the Company's unaudited financial statements for the
second quarter ended June 30, 2012, and the accompanying
management's discussion and analysis are available on SEDAR at
www.sedar.com and the Company's website at www.cazapetro.com.
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 +44 7796 861 892
Cenkos Securities plc
Jon Fitzpatrick +44 20 7397 8900 (London)
Beth McKiernan +44 131 220 6939 (Edinburgh)
VSA Capital Limited
Andrew Raca +44 (0) 20 3005 5004
Malcolm Graham-Wood +44 (0) 20 3005 5012
M:Communications
Patrick d'Ancona +44 20 7920 2330
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
information within the meaning of securities laws. Such information
is often, but not always, identified by the use of words such as
"seek", "anticipate", "plan", "schedule", "continue", "estimate",
"expect", "may", "will", "project", "predict", "potential",
"intend", "could", "might", "should", "believe", "develop", "test",
"anticipation" and similar expressions. In particular, information
regarding the depth, timing and location of future drilling,
intended production testing and the Company's future working
interests and net revenue interests in properties contained in this
news release constitutes forward-looking information within the
meaning of securities laws.
Implicit in this information, are assumptions regarding the
success and timing of drilling operations, rig availability,
projected revenue and expenses and well performance. These
assumptions, although considered reasonable by the Company at the
time of preparation, 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 general economic, market and
business conditions and could differ materially from what is
currently expected as set out above. In addition, the geotechnical
analysis and engineering to be conducted in respect of the various
wells is not complete. Future flow rates from wells may vary,
perhaps materially, and wells may prove to be technically or
economically unviable. Any future flow rates will be subject to the
risks and uncertainties set out herein.
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.
Boe may be misleading, particularly if used in isolation. A Boe
conversion ratio of 6 Mcf : 1 bbl is based on an energy equivalency
conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the well head.
Caza Oil & Gas, Inc.
Condensed Consolidated Statement of Financial Position
(Unaudited)
June 30, December 31,
(In United States dollars) 2012 2011
Assets
Current
Cash and cash equivalents $ 4,715,163 $ 10,204,176
Accounts receivable 2,218,217 3,680,998
Prepaid and other 193,529 312,704
-------------- -------------
7,126,909 14,197,878
Exploration and evaluation assets (Note 2) 5,609,725 4,941,256
Assets held for sale (Note 3 and 9) 5,791,742 -
Petroleum and natural gas properties
and equipment (Note 3) 21,125,541 29,419,741
-------------- -------------
$ 39,653,917 $ 48,558,875
-------------- -------------
Liabilities
Current
Accounts payable and accrued
Liabilities $ 2,218,766 $ 5,352,445
Decommissioning liabilities (Note 4) 852,254 1,052,091
-------------- -------------
3,071,020 6,404,536
Shareholders' Equity
Share capital 75,064,216 75,064,216
Share based compensation reserve 9,518,562 9,430,656
Deficit (47,622,781) (42,747,681)
-------------- -------------
Equity attributable to owners of the
Company 36,959,997 41,747,191
Non-controlling interests (377,100) 407,148
-------------- -------------
Total equity 36,582,897 42,154,339
-------------- -------------
$ 39,653,917 $ 48,558,875
See accompanying notes to the condensed consolidated financial statements
Caza Oil & Gas, Inc.
Condensed Consolidated Statements of Net Loss and Comprehensive
Loss
(Unaudited)
Three months ended Six months ended
June 30, June 30,
(In United States dollars) 2012 2011 2012 2011
------------------------------------------------------ ---------------- ------------- --------------- ------------
Revenue and other
Petroleum and natural gas $ 1,093,694 $ 843,836 $ 2,486,422 $ 1,887,779
Interest income 493 4,346 792 13,038
---------------- ------------- --------------- ------------
1,094,187 848,182 2,487,214 1,900,817
---------------- ------------- --------------- ------------
Expenses
Production 692,111 185,439 1,112,869 351,735
General and administrative 1,540,139 1,403,088 2,906,019 2,495,999
Depletion and depreciation 623,145 580,141 1,405,009 1,399,254
Financing costs - unwinding of the discount 4,133 6,597 8,266 13,194
Other expense (income) - (42,006) (176,004) (96,193)
Development and production impairment (note3) - - 2,688,506 73,183
Exploration and evaluation impairment - 292,074 - 2,915,699
Re-plugging expense 201,897 - 201,897 -
---------------- ------------- --------------- ------------
3,061,425 2,425,333 8,146,562 7,152,871
---------------- ------------- --------------- ------------
Net loss and comprehensive loss for the period (1,967,238) (1,577,151) (5,659,348) (5,252,054)
---------------- ------------- --------------- ------------
Attributable to:
Owners of the Company (1,694,627) (1,358,110) (4,875,100) (4,522,627)
Non-controlling interests (272,611) (219,041) (784,248) (729,427)
---------------- ------------- --------------- ------------
$ (1,967,238) (1,577,151) $ (5,659,348) (5,252,054)
---------------- ------------- --------------- ------------
Net loss per share
- basic and diluted (0.01) (0.01) (0.03) (0.03)
Weighted average shares outstanding
- basic and diluted (1) 164,743,667 164,330,813 164,743,667 164,324,939
================ ============= =============== ============
(1) All options and warrants have been excluded from the diluted loss per share computation
as they are anti-dilutive.
See accompanying notes to the interim condensed consolidated financial statements
Caza Oil & Gas, Inc.
Condensed Consolidated Statement of Cash Flows
(unaudited)
Six months ended
June 30,
(In United States dollars) 2012 2011
------------------------------------------------ ------------ ------------
OPERATING
Net loss for the period (5,659,348) (5,252,054)
Adjustments for items not affecting
cash:
Depletion and depreciation 1,405,009 1,399,254
Unwinding of the discount 8,266 13,194
Share-based compensation 87,906 41,574
Development and production impairment
(Note 3) 2,688,506 73,183
Exploration and evaluation impairment - 2,915,699
Other expense (income) (176,004) (54,185)
Interest income (792) (13,038)
Changes in non-cash working capital
(Note 7a) (923,213) 716,012
------------ ------------
Cash flows (used in) from operating
activities (2,569,670) (160,361)
------------ ------------
FINANCING
Interest received 792 13,038
Proceeds from issuance of shares - 1,750
------------ ------------
Cash flow from financing activities 792 14,788
------------ ------------
INVESTING
Exploration and evaluation expenditures (1,787,000) (4,656,268)
Development and production expenditures (1,531,509) (2,962,647)
Purchase of office furniture and
equipment (1,944) (18,879)
Joint interest billings partner reimbursements 1,028,828 -
Changes in non-cash working capital
(Note 7a) (628,510) (1,569,082)
------------ ------------
Cash flows used in investing activities (2,920,135) (9,206,876)
------------ ------------
DECREASE IN CASH AND CASH EQUIVALENTS (5,489,013) (9,352,449)
CASH AND CASH EQUIVALENTS, BEGINNING
OF THE PERIOD 10,204,176 33,885,900
------------ ------------
CASH AND CASH EQUIVALENTS, END OF
THE PERIOD 4,715,163 24,533,451
============ ============
Supplementary
information (Note 7)
See accompanying notes to the
condensed
consolidated financial statements
Caza Oil & Gas, Inc.
Condensed Consolidated Statement of Changes in Equity
(Unaudited)
For the six months periods ended June 30,
(in United States dollars) 2012 2011
-------------------------------------------------- -------------- --- --------------
Share Capital
Balance, Beginning of Period 75,064,216 75,013,680
Common Shares Issued - 2,975
Balance, End of Period 75,064,216 75,016,655
-------------- --------------
Contributed Surplus
Balance, Beginning of Period 9,430,656 9,363,598
Exercise of stock options - (1,225)
Share-Based Compensation 87,906 41,574
Balance, End of Period 9,518,562 9,403,947
-------------- --------------
Deficit
Balance, Beginning of Period (42,747,681) (22,700,262)
Net loss, allocated to owners of the Company (4,875,100) (4,522,627)
Balance, End of Period (47,622,781) (27,222,889)
-------------- --------------
Non-Controlling Interests
Balance, Beginning of Period 407,148 3,636,761
Net loss allocated to non-controlling interests (784,248) (729,427)
Balance, End of Period (377,100) 2,907,334
-------------- --------------
Total Shareholders' Equity 36,582,897 60,105,047
-------------- --------------
See accompanying notes to the condensed consolidated
financial statements
1. Basis of Presentation
Caza Oil & Gas, Inc. ("Caza" or the "Company") was
incorporated under the laws of British Columbia on June 9, 2006 for
the purposes of acquiring shares of Caza Petroleum, Inc. ("Caza
Petroleum"). The Company and its subsidiaries are engaged in the
exploration for and the development, production and acquisition of,
petroleum and natural gas reserves. The Company's common shares are
listed for trading on the TSX (symbol "CAZ") and AIM stock
exchanges (symbol "CAZA"). The corporate headquarters of the
Company is located at 10077 Grogan's Mill Road, Suite 200, The
Woodlands, Texas 77380 and the registered office of the Company is
located at Suite 1700, Park Place, 666 Burrard Street Vancouver,
British Columbia, V6C 2X8.
Caza's functional and presentational currency is the United
States ("U.S.") dollar as the majority of its transactions are
denominated in the currency.
The condensed consolidated financial statements (the "Financial
Statements") were prepared in accordance with IAS 34 - Interim
Financial Reporting using accounting policies consistent with
International Financial Reporting Standards ("IFRS").
These Financial Statements should be read in conjunction with
the Company's audited annual consolidated financial statements as
at and for the year ended December 31, 2011, which outline the
Company's significant accounting policies in Note 2 thereto, as
well as the Company's critical accounting judgements and key
sources of estimation uncertainty, which have been applied
consistently in these Financial Statements. The note disclosure
requirements of annual consolidated financial statements provide
additional disclosures to that required for interim unaudited
condensed consolidated financial statements.
These Financial Statements were approved for issuance by the
Board of Directors on August 8, 2012.
2. Exploration and evaluation assets ("E&E")
June 30, December 31,
2012 2011
------------------------------------------------ ------------ -------------
Balance, beginning of the period $ 4,941,256 $ 7,371,582
Additions to exploration and evaluation assets 1,796,602 9,271,394
Transfers to property, plant and equipment (6,327) (5,361,725)
Joint interest billings partner reimbursements (1,028,828) -
Transfers to held for sale (92,978) -
Exploration and evaluation impairment - (6,339,995)
Balance, end of the period $ 5,609,725 $ 4,941,256
------------------------------------------------ ------------ -------------
During the year ended December 31, 2011, the Company expensed
$6,339,995 of exploration and evaluation costs of which $2,594,801
related to the Marian Baker et al, No 1 drilled during the three
months ended March 31, 2011 that did not encounter hydrocarbons as
well as an impairment to the valuation of the Las Animas prospect
in the amount of $1,146,226. The balance of the costs expensed
related to other leasehold and prospect expenditures that have
expired or no longer provide value for the Company.
3. Petroleum and natural gas properties and equipment
Development & Production Assets Corporate Assets Total
---------------------------------------- -------------------------------- --------------------- -------------
Cost
Balance, December 31, 2011 $ 45,223,073 $ 826,882 $ 46,049,955
Additions 1,489,808 1,944 1,491,752
Transfers to held for sale (6,424,174) - (6,424,174)
Transfers from E&E 6,327 - 6,327
Balance, June 30, 2012 $ 40,295,034 $ 828,826 $ 41,123,860
---------------------------------------- -------------------------------- --------------------- -------------
Development & Production Assets Corporate Assets Total
---------------------------------------- ------------------------------------ ----------------- -------------
Accumulated Depletion and Depreciation
Balance, December 31, 2011 $ 15,943,179 $ 687,035 $ 16,630,214
Depletion and depreciation 1,340,292 64,717 1,405,009
Transfers to held for sale (725,410) - (725,410)
Impairment 2,688,506 - 2,688,506
Balance, June 30, 2012 $ 19,246,567 $ 751,752 $ 19,998,319
---------------------------------------- ------------------------------------ ----------------- -------------
Carrying amounts
At December 31, 2011 $ 29,279,894 $ 139,847 $ 29,419,741
At June 30, 2012 $ 21,048,467 $ 77,074 $ 21,125,541
---------------------- ------------- ---------- -------------
Future development costs of proved undeveloped reserves of
$30,722,900 were included in the depletion calculation at June 30,
2012 and December 31, 2011. The Company did not note any
indications of impairment as at June 30, 2012. The Company
performed an impairment test at March 31, 2012 to assess whether
the carrying value of its petroleum and natural gas properties
exceeds fair value. An impairment in the amount of $2,688,506 was
required to be recorded as at March 31, 2012 primarily due to
changes in the estimates of expected future natural gas prices used
in determining the fair value.The March 31, 2012 impairment was
recognized using a 16% discount rate (December 31, 2011 - 16%).
On July 18, 2012 the Company sold the San Jacinto property
consisting of the Caza Elkins 3401 and 3402 wells (see Note 9). The
capitalized costs and accumulated depletion associated with these
properties have been re-classed to assets held for sale.
4. Decommissioning Liabilities
The following table presents the reconciliation of the beginning
and ending aggregate carrying amount of the obligation associated
with the retirement of oil and gas properties:
June 30, Year ended
December 31,
2011 2011
----------- -------------
Decommissioning liabilities, beginning
of the period $ 1,052,091 $ 807,754
Obligations incurred 55,091 131,318
Revision in estimated cash flows and discount
rate (20,761) 171,100
Obligations settleddisposals (242,433) (79,898)
Unwinding of the discount 8,266 21,817
Decommissioning liabilities, end of the
period $ 852,254 $ 1,052,091
----------- -------------
The undiscounted amount of cash flows, required over the
estimated reserve life of the underlying assets, to settle the
obligation, adjusted for inflation, is estimated at $1,224,619
(December 31, 2011 - $1,533,283). The obligation was calculated
using a risk free discount rate of 2.5 percent and an inflation
rate of 3 percent. It is expected that this obligation will be
funded from general Company resources at the time the costs are
incurred with the majority of costs expected to occur between 2012
and 2030.
5. Related Party Transactions
The aggregate amount of expenditures made to related
parties:
Singular Oil & Gas Sands, LLC ("Singular") is a related
party as it is a company under common control with Zoneplan
Limited, which is a significant shareholder of Caza.
Singular participates in the drilling of the Matthys McMillan
Gas Unit #2 and the O B Ranch #1 and 2 wells located in Wharton
County, Texas. Under the terms of that agreement, Singular paid
14.01% of the drilling costs through completion to earn a 10.23%
net revenue interest on the Matthys McMillan Gas Unit #2 well and
paid 12.5% of the drilling costs to earn a 6.94% net revenue
interest on the O B Ranch #1 well. Under the terms of the agreement
of the O B Ranch #2 Singular paid 9.375% of the drilling costs to
earn approximately 6.8% net revenue interest. This participation
was in the normal course of Caza's business and on the same terms
and conditions to those of other joint interest partners. Singular
owes the Company $531,756 in joint interest partner receivables as
at June 30, 2012 (December 31, 2011 - $492,240).
All related party transactions are in the normal course of
operations and have been measured at the agreed to exchange
amounts, which is the amount of consideration established and
agreed to by the related parties and which is comparable to those
negotiated with third parties.
6. Commitments and Contingencies
As of June 30, 2012, the Company is committed under operating
leases for its offices and
corporate apartment in the following aggregate minimum lease
payments which are shown below:
2012 $ 157,777
2013 $ 95,090
2014 $ 81,200
7. Supplementary Information
(a) net change in non-cash working capital
June 30, June 30,
2012 2011
------------------------------ ------------ ------------
Provided by (used in)
Accounts receivable 1,462,781 (942,329)
Prepaid and other 119,175 104,379
Accounts payable and accrued
liabilities (3,133,679) (15,120)
------------ ------------
(1,551,723) (853,070)
------------ ------------
Summary of changes
Operating (923,213) 716,012
Investing (628,510) (1,569,082)
(1,551,723) (853,070)
------------ ------------
(b) supplementary cash flow information
June 30, June 30,
2012
2011
------------------- ---------- ---------
Interest paid $ - $ -
Interest received 792 13,038
(c) cash and cash equivalents
June 30, December
31,
2012 2011
--------------------------- ------------ -------------
Cash on deposit $ 482,561 $ 272,699
Money market instruments 4,232,602 9,931,477
------------ -------------
Cash and cash equivalents $ 4,715,163 $ 10,204,176
============ =============
The money market instruments bear interest at a rate of 0.07% as
at June 30, 2012 (December 31, 2011 - 0.033%).
8. Financial Instruments
Credit Risk
Credit risk arises when a failure by counter parties to
discharge their obligations could reduce the amount of future cash
inflows from financial assets on hand at the consolidated statement
of financial position date. A majority of the Company's financial
assets at the consolidated statement of financial position date
arise from natural gas liquids and natural gas sales and the
Company's accounts receivable that are with these customers and
joint interest participants in the oil and natural gas industry.
Industry standard dictates that commodity sales are settled on the
25th day of the month following the month of production. The
Company's natural gas and condensate production is sold to large
marketing companies. Typically, the Company's maximum credit
exposure to customers is revenue from two months of sales. During
the period ended June 30, 2012, the Company sold 78.11% (June 30,
2011 - 67.77%) of its natural gas and condensates to a single
purchaser. These sales were conducted on transaction terms that are
typical for the sale of natural gas and condensates in the United
States. In addition, when joint operations are conducted on behalf
of a joint interest partner relating to capital expenditures, costs
of such operations are paid for in advance to the Company by way of
a cash call to the partner of the operation being conducted.
Caza management assesses quarterly whether there should be any
impairment of the financial assets of the Company. At June 30,
2012, the Company had overdue accounts receivable from certain
joint interest partners of $29,872 which were outstanding for
greater than 60 days and $543,079 that were outstanding for greater
than 90 days. At June 30, 2012, the Company's two largest joint
interest partners represented approximately 24% and 4% of the
Company's receivable balance (June 30, 2011 36% and 7%
respectively). The maximum exposure to credit risk is represented
by the carrying amount on the consolidated statement of financial
position of cash and cash equivalents, accounts receivable and
deposits.
9. Subsequent Event
On July 18, 2012, the Company sold the San Jacinto property
which includes the Caza Elkins 3401 and 3402 wells for
consideration of $6,100,000. The Company had an 85% working
interest in the Caza Elkins 3401 with a 63.75% net revenue
interest. In all subsequent wells on the San Jacinto property,
including the Caza Elkins 3402 well and the remainder of the
leases, Caza had a 75% working interest and a 56.25% net revenue
interest. The closing date of the transaction was July 31,
2012.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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