Caza Oil & Gas Announces Initial Production at Lennox and Provides Update at Caza Ridge
July 4, 2013 (Source: Marketwired) — Caza Oil & Gas, Inc. (“Caza” or the “Company”) (TSX:CAZ)(AIM:CAZA) is pleased to provide a production update for the Company’s initial horizontal Bone Spring well on its Lennox Prospect and an operational update on the Caza Ridge development well on its Copperline Prospect. Both properties are located in Lea County, New Mexico.
As previously announced, the fracture stimulation on the Lennox State Unit 32 #2H horizontal Bone Spring well was successful. The well was placed on artificial lift and has been producing to recover frac fluids and establish stabilized flow rates for oil and natural gas. During controlled flowback the oil and natural gas rates have continued to increase and have now stabilized at daily rates of 334 barrels (bbls) of oil and 337 thousand cubic feet of natural gas (Mcf), which equates to 390 bbls of oil equivalent (Boe) per day, in each case falling within the Company’s expectations and typical play parameters.
Caza has a 40.00% working interest before payout (31.08% net revenue interest) and a 50.00% working interest after payout (38.85% net revenue interest) in the Lennox State Unit 32 #2H well and will participate with a 50.00% working interest in all subsequent wells drilled by Caza on the Lennox property.
The Company’s Caza Ridge 14 State #4H well has reached its kick-off point above the 3rd Bone Spring sand interval in the vertical portion of the wellbore. Log data and core samples have been obtained across the Brushy Canyon, Avalon and 2nd Bone Spring sand intervals and have indicated the presence of oil and natural gas across each of these intervals. This is favourable for the future development potential of this property. The Company will now proceed to set the curve and drill the lateral section of the well in the 3rd Bone Spring sand interval, which is producing oil and natural gas in the offset Caza Ridge 14 State #3H well.
Caza has a 58.75% working interest (approximate 44.80% net revenue interest) in the Caza Ridge 14 State #4H well.
W. Michael Ford, Chief Executive Officer commented:
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“This is a good result for the initial test well at Lennox. The detailed completion procedure performed on this well will help determine the future development of this property. The next Lennox well will be the Lennox State Unit 32 #4H, which will target the 3rd Bone Spring sand interval and should commence drilling operations later this year. We also continue to prepare the Gateway and West Copperline Bone Spring prospects for drilling in the near future.”
“Additionally, we are pleased to report that the Caza Ridge 14 State #4H well has reached the lateral kick-off point, and log and core data have confirmed the presence of oil and natural gas in the shallower sections of the well. We are currently preparing to drill the lateral section of the well in the 3rd Bone Spring sand, which has proven to be a good producer of oil and natural gas in the offset Caza Ridge 14 State #3H well. We look forward to completing the 3rd Bone Spring lateral and fracture stimulating this well before bringing it online in the near future.”
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).
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.
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 well operations and production testing, future drilling results and success 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 certain wells may not be 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.
Barrels of oil equivalent or 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 wellhead.
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