TIDMCAZA
RNS Number : 3058Z
Caza Oil & Gas, Inc.
05 February 2014
February 5, 2014
Caza Oil & Gas, Inc.
CAZA OIL & GAS PROVIDES FOURTH QUARTER PRODUCTION UPDATE
AND
BONE SPRING OPERATIONAL UPDATE
HOUSTON, TEXAS (Marketwire - February 5, 2014) - Caza Oil &
Gas, Inc. ("Caza" or the "Company") (TSX: CAZ) (AIM: CAZA) is
pleased to provide the following production update for the Company
along with an operational update for its Bone Spring exploration
and development program in Lea and Eddy Counties, New Mexico.
The following production highlights show the significance of the
Bone Spring production results to the Company thus far, as well as
the significant effect the Company's continuous Bone Spring
drilling program has had on its current production figures:
-- Caza's aggregate net production for Q4 2013 was approximately
47,996 Boe, an increase of 11,505 Boe (32%) over the aggregate net
production in Q3 2013 (36,491 Boe).
-- Caza's average daily net production for Q4 2013 was
approximately 522 Boe/d, an increase of 32% over the average daily
net production in Q3 2013 (397 Boe/d) and an increase of 67% over
the corresponding three-month period in 2012 (312 Boe/d).
-- Caza's average daily net production reached approximately 608
Boe/d in December 2013, an increase of 58% over the average daily
net production rate for September 2013 (384 Boe/d), the last month
in Q3 2013.
-- When production began from the initial Bone Spring wells in
Q3 2012, Caza's oil and natural gas liquids ("NGL") production was
only 40% of the Company's combined oil and natural gas production.
This figure has continued to increase with Bone Spring drilling and
Caza's oil and NGL production at December 31, 2013 was
approximately 72% of the Company's combined oil and natural gas
production.
-- Sustained production increases from Caza's Bone Spring
operations have resulted in the Company being cashflow positive.
The Company's yearend reserve report and final results will be
published in late March 2014.
In just over a year, since Q3 2012, Caza has increased its net
daily production by approximately 155% while successfully
transforming the Company from being predominantly a natural gas
producer to being predominantly an oil and liquids producing
company, which were both stated goals of Management from the onset
of transitioning into the Bone Spring Play. If successful, the five
wells that are either currently drilling and/or planned for the
near term, as mentioned below, should continue these trends and
have a notably positive effect on both categories once they are
online and producing.
Current and Planned Drilling
The Company is currently drilling two new wells in Lea County,
New Mexico, the operated West Copperline 29 Fed Com No. 3H well and
the non-operated Marathon Road 15 PA Fed No. 1H well on what was
formerly known as Caza's Lynch property.
The Company has recently signed a four well rig contract and
plans to drill four operated wells in succession, moving the rig
from the currently drilling West Copperline 29 Fed Com No. 3H well
to the West Copperline Fed Com No. 2H well location, then to the
Gramma Ridge 27 State No. 1H well location, then most likely back
to the West Copperline property.
In addition to the five wells mentioned above, since Caza's
strategic move to focus on the Bone Spring Play in Southeast New
Mexico, the Company has drilled or participated in a total of
eighteen currently producing oil and natural gas wells in Lea and
Eddy Counties. This includes twelve wells with varying but
meaningful working and net revenue interests and six wells with
relatively immaterial interests that have provided the Company with
critical information about the play.
Production Forecast
Caza plans to immediately begin building on its Q4 2013
production figures with the drilling of four operated wells and one
non-operated well during Q1 and Q2 2014. The current timing and
status of each well is as follows:
Operated Wells
-- West Copperline 29 Fed Com No. 3H - Drilling
-- West Copperline Fed Com No. 2H - Planned for Q1 2014
-- Gramma Ridge 27 State No. 1H - Planned for beginning of Q2 2014
-- West Copperline 29 Fed Com No. 4H (or a substitute well) - Planned for late Q2 2014
Non-Operated Wells
-- Marathon Road 15 PA Fed No. 1H - Drilling
Assuming these wells are successful and drilled on schedule,
Management believes they should materially increase Caza's
aggregate and daily net production figures. Caza's internal
forecast has net aggregate production reaching 32,783 Boe for the
month of April 2014, which is 1,092 Boe/d. That growth is
forecasted to continue through August 2014, when net aggregate
production is forecasted to reach 35,538 Boe for the month, which
is 1,185 Boe/d.
Business Development
The Company intends to continue growing and exploiting its
inventory of low-risk, liquids-rich development opportunities in
the broader Bone Spring Play, which contains multiple geologic
reservoirs and play types at various depths. Additionally,
Management intends to identify and pursue suitable Bone Spring
acquisitions that would provide an opportunity for the Company to
increase its position in the Bone Spring Play, while adding growth
to its existing cashflow, reserve and production base allowing
shareholder value to be maximized in the short to mid-term.
Debt Facilities
In March 2013, the Company entered into a US$50,000,000 Note
Purchase Agreement with Apollo Investment Corporation, an
investment fund managed by Apollo Investment Management. To date
the Company has drawn US$35,000,000 against the note and may draw
additional advances up to US$15,000,000 at its discretion, subject
to specified performance and financial requirements.
In November 2013, the Company entered into an agreement in
relation to a $4.3 million convertible unsecured loan made
available by YA Global Master SPV Ltd., an investment fund managed
by Yorkville Advisors LLC ("Yorkville"). The Loan consisted of $3.5
million of new credit facilities along with an additional $0.84
million that was used to repay amounts which remained outstanding
under a prior loan from Yorkville. The current outstanding balance
of the Yorkville loan is approximately $3,926,239.
The Company has used and continues to specifically use these
facilities to advance its drilling and producing operations in the
Bone Spring Play in Southeast New Mexico.
W. Michael Ford, Chief Executive Officer commented:
"We are very pleased with the production gains achieved since
Caza entered the Bone Spring Play in Southeast New Mexico. The
Company's average Q4 2013 production figures have increased by 32%
over our Q3 figures of the same year. December's average production
alone increased 58% over September 2013. Taken as a whole, our move
to focus on the Bone Spring has yielded a 155% uplift in production
since Q3 2012. With this sustained production growth, I'm happy to
report that the Company is currently cashflow positive."
"The Apollo and Yorkville funding has allowed Caza to plan and
maintain a continuous drilling program, which has had a significant
and positive effect, evidenced by our most recent production
figures. As we drill and complete the next five wells beginning in
Q1 2014, we hope they will have a similar positive impact on our
production. We will continue to update the market as these wells
are drilled and brought online."
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.:
Permian Basin (West Texas and Southeast New Mexico) and Texas and
Louisiana Gulf Coast (on-shore).
For further information, please contact:
Caza Oil & Gas, Inc.
Michael Ford, CEO +1 432 682 7424
John McGoldrick, Chairman +65 9731 7471 (Singapore)
Cenkos Securities plc
Beth McKiernan +44 131 220 9778 (Edinburgh)
Neil McDonald +44 131 220 6939 (Edinburgh)
VSA Capital Limited
Andrew Raca +44 20 3005 5004
VIGO Communications
Chris McMahon +44 20 7016 9570
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", "excellent", "may", "will", "hope", "project", "predict",
"potential", "intend", "could", "might", "should", "believe",
"develop", "test", "anticipation", "looks to be" and similar
expressions. In particular, information regarding timing and
success of drilling and/or completion operations, the impact of
planned drilling operations, future production rates, development
opportunities and the availability and impact of future
acquisitions contained in this news release constitutes
forward-looking information within the meaning of securities
laws.
Implicit in the forward looking information are assumptions
regarding the success and timing of drilling and completion
operations, rig availability, projected production, commodity
prices, projected revenue and expenses, absence of unplanned
maintenance and other operational disruptions, and the performance
of existing and contemplated wells. 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, risks associated with the
availability of financing, risks associated with drilling and
completion operations, well performance and operating risks and
could differ materially from what is currently expected as set out
above. Actual production may vary, perhaps materially, from the
forecast production rates disclosed herein. Such forecast
production rates pertain only to the periods disclosed and are
subject to the assumptions, risks and uncertainties described
herein. Such production forecasts are not indicative of long-term
performance or of ultimate recovery.
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 or barrel of oil equivalent may be misleading, particularly
if used in isolation. A boe conversion of six thousand cubic feet:
1 barrel 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. As the value ratio based on the
current price of oil as compared to natural gas is significantly
different from the energy equivalency of 6:1, utilizing a
conversion on a 6:1 basis may be misleading as an indication of
value.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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