Crimson Exploration Inc. Announces Strong Woodbine Test, Restoration of
Liberty County Well to Production and Third Quarter Production Results
HOUSTON -- October 31, 2012
Crimson Exploration Inc. (NasdaqGM: CXPO) provides an operational update for
*Covington-Upchurch #1H produced at a gross 24-hr rate of 6.9 Mmcfepd,
through the toe of the well only
*Catherine Henderson #A-6 has been restored to a restricted gross
production rate of 7.2 Mmcfepd
*Third quarter production of 3.6 Bcfe, or 38,759 Mcfepd, in line with
*Third quarter crude oil and liquids production exceeds production ratio
greater than 50 percent
Woodbine Formation - Grimes County, Texas
In Grimes County, TX, the Covington-Upchurch #1H well (67.8% WI), targeting
the Woodbine formation, has been drilled to a total measured depth of 15,228
feet, including a 5,190 foot lateral. In preparation for completion
operations, Crimson perforated only the toe stage of the lateral section
which, during a 24-hr period, produced naturally (i.e. without fracture
stimulation) at a rate of approximately 6.9 Mmcfepd, or 179 barrels of
condensate, 205 barrels of natural gas liquids and 4.6 Mmcf of natural gas.
The well has yet to be fracture stimulated and the above rate represents
production from only one of the fifteen (14 + toe) planned perforation stages.
The production rate for the well is anticipated to improve upon conducting
fracture stimulation operations along the entire lateral; however, it is not
possible to estimate at this time what total production rate will be achieved
from the full lateral section.
At present, gas pipeline and liquids extraction infrastructure in the Grimes
County area is not sufficient to take the full gas volumes from this well. It
is anticipated that additional capacity will be developed in the area by
year-end. Full fracture stimulation operations on this well are currently
ongoing and are expected to be complete in mid-late November with a full
wellbore flow test to follow.
In Madison County, TX, the previously reported Payne #1H well (92.1% WI),
which was completed in the Woodbine formation and placed online on July 21,
2012, has averaged in its first 100 days approximately 1,014 Boepd and has
cumulatively produced approximately 101,430 Boe. At the time of announcement
the well had only ten days of production history.
Allan D. Keel, President and Chief Executive Officer, commented, “Crimson is
extremely encouraged by the sustained high production rate in the Payne #1H in
our Force Area of Madison County and the initial flowback in the
Covington-Upchurch #1H from only a single non-stimulated stage of the lateral,
indicating a strong economic well. The Covington-Upchurch well is valuable in
de-risking our Iola-Grimes acreage position in Grimes County, TX where we have
approximately 7,650 net acres. As previously disclosed, we expect delivery, in
early December, of the rig we will use for a continuous drilling program in
Madison and Grimes counties during 2013.”
Liberty County, Texas
In Liberty County, TX, the Catherine Henderson #A-6 well (60.8% WI) was
successfully sidetracked and brought back on line at a restricted gross
initial production rate of 7.2 Mmcfepd, or 262 barrels of oil condensate, 307
barrels of natural gas liquids and 3.8 Mmcf of natural gas, on a 16/64^th
choke with 3,298 psi of flowing tubing pressure.
As previously disclosed, the original well was lost due to mechanical problems
in January 2012 and was a significant contributor to Crimson’s conventional
production base. Production has now been restored to near pre-workover levels
as the well continues to clean up. Bottom hole pressure measurements confirm
that the well has significant proved reserves remaining.
Third Quarter Production Results
Production for the third quarter of 2012 was approximately 3.6 Bcfe, or
38,759Mcfe per day, achieving the mid-point of our stated production guidance
range of 37,000 – 40,000 Mcfe per day. Crude oil and natural gas liquids
production ratio was 50.4% for the third quarter, up from 46% in the second
quarter of 2012, and up from 29% in the prior year quarter. This marks the
first quarter Crimson’s crude oil and natural gas liquids production has
exceeded a ratio greater than 50 percent. Since 2011, Crimson has achieved its
stated goal of a balanced production profile by targeting its extensive
liquids-rich inventory of projects in the East Texas Woodbine formation and
the South Texas Eagle Ford Shale. That ratio should continue to increase due
to Crimson’s liquids focused drilling program planned for 2013.
Crimson Exploration is a Houston, TX-based independent energy company engaged
in the acquisition, development, exploitation and production of crude oil and
natural gas, primarily in the onshore Gulf Coast regions of the United States.
The Company owns and operates conventional properties in Texas, Louisiana,
Colorado and Mississippi, including approximately 18,500 net acres in Madison
and Grimes counties in Southeast Texas, approximately 8,200 net acres in the
Eagle Ford Shale in South Texas, approximately 11,000 net acres in the Denver
Julesburg Basin of Colorado, and approximately 5,700 net acres in the
Haynesville Shale, Mid-Bossier, and James Lime plays in San Augustine and
Sabine counties in East Texas.
Additional information on Crimson Exploration Inc. is available on the
Company's website at http://crimsonexploration.com.
This press release includes “forward-looking statements” as defined by the
Securities and Exchange Commission (“SEC”) and applicable securities laws.
Such statements include those concerning Crimson’s strategic plans,
expectations and objectives for future operations. All statements included in
this press release that address activities, events or developments that
Crimson expects, believes or anticipates will or may occur in the future are
forward-looking statements. These statements are based on certain assumptions
Crimson made based on its experience and perception of historical trends,
current conditions, expected future developments and other factors it believes
are appropriate under the circumstances. Such statements are subject to a
number of assumptions, risks and uncertainties, many of which are beyond
Crimson’s control. Statements regarding future production, revenue, cash flow
operating results, leverage, drilling rigs operating, drilling locations,
funding, derivative transactions, pricing, operating costs and capital
spending, tax rates, and descriptions of our development plans are subject to
all of the risks and uncertainties normally incident to the exploration for
and development and production of oil and gas. These risks include, but are
not limited to, commodity price changes, inflation or lack of availability of
goods and services, environmental risks, the proximity to and capacity of
transportation facilities, the timing of planned capital expenditures,
uncertainties in estimating reserves and forecasting production results,
operating and drilling risks, regulatory changes and the potential lack of
capital resources. All forward-looking statements are based on our forecasts
for our existing operations and do not include the potential impact of any
future acquisitions. Investors are cautioned that any such statements are not
guarantees of future performance and that actual results or developments may
differ materially from those projected in the forward-looking statements.
Please refer to our filings with the SEC, including our Form 10-K for the year
ended December 31, 2011, and subsequent filings for a further discussion of
these risks. Existing and prospective investors are cautioned not to place
undue reliance on forward-looking statements, which speak only as of the date
hereof. We undertake no obligation to publicly update or revise any
forward-looking statements after the date they are made, whether as a result
of new information, future events or otherwise.
Crimson Exploration Inc.
E. Joseph Grady, 713-236-7400
Senior Vice President and Chief Financial Officer
Josh Wannarka, 713-236-7400
Manager of Investor Relations and FP&A
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