Crimson Exploration Provides Operational Update, Fourth Quarter Production
and Announces Preliminary 2013 Capital Program
HOUSTON -- February 5, 2013
Crimson Exploration Inc. (NasdaqGM:CXPO) today provides an operational update
on recent activity in the Woodbine formation in Madison and Grimes Counties,
Texas, announces fourth quarter production at the upper range of guidance and
announces its preliminary 2013 capital program.
Madison County, Texas – Force Area Woodbine
In Madison County, Texas, Crimson spud the Nevill-Mosley #1H well (82.0% WI),
targeting the Woodbine formation, and is currently drilling at approximately
8,130 feet. The Company anticipates drilling to a total measured depth of
approximately 15,000 feet, including a 6,300 foot north-south lateral, and
conducting approximately 22 stages of fracture stimulation. Completion
operations are expected to begin in March with initial production to follow in
The Nevill-Mosley #1H well’s surface location is located approximately 1.9
miles to the northwest of the Mosley #1H well (84.3% WI) which commenced
production in March 2012 and has cumulatively produced in excess of 178,000
barrels of oil equivalent (85% oil) to date. The Nevill-Mosley #1H is
Crimson’s first well in the 2013 capital program, and upon completion of
drilling operations the rig is anticipated to move 1.7 miles east to begin
drilling the Mosley B #1H well (86.3% WI).
The Gatlin #1H well (3.1% WI), operated by Woodbine Acquisition LLC, was
successfully completed in the Woodbine formation at a total measured depth of
15,720 feet, including a 6,450 foot lateral. The Gatlin unit is located
approximately 0.5 miles south of Crimson’s Mosley #1H well. The well was
placed online with a 24-hr initial production rate of 1,436 boepd.
Grimes County, Texas – Iola/Grimes Area Woodbine
In Grimes County, TX, the Covington-Upchurch #1H well (67.8% WI), was
successfully completed in the Woodbine formation at a total measured depth of
15,228 feet, including a 5,190 foot lateral. The well was fracture stimulated
with 15 perforation stages, using the perforate and plug completion method.
Full flow back operations have been postponed as a result of delays in
completing infrastructure capable of handling natural gas production with
higher BTU content in the area. Crimson has arranged for installation of a
refrigeration unit which is expected to be completed by mid-February. Once
installed, this unit will allow Crimson to increase production to optimum
rates, provide formal initial production results, and capitalize on higher
margin natural gas liquids production.
Fourth Quarter Production Results
Production for the fourth quarter of 2012 was approximately 3.4 Bcfe, or
36,840Mcfe per day, achieving the upper end of the Company’s stated
production guidance range of 34,000 – 37,000 Mcfe per day. In the fourth
quarter, crude oil and natural gas liquids production increased to 254,039
barrels, or 45% of total production, up from 207,272 barrels, or 34% of total
production, in the fourth quarter of 2011. The increase in liquids production
is a result of a strategic shift toward Woodbine and Eagle Ford projects that
was initiated in 2011 amid continued suppressed natural gas prices.
Preliminary 2013 Capital Program
In 2013, Crimson will continue to focus on its extensive inventory of high
margin, low risk crude oil and liquids-rich projects in the Woodbine formation
with a continuous rig program planned for 2013. Subject to capital
availability, the company may also drill test wells in the liquids-rich James
Lime formation in East Texas and/or the crude oil and liquids-rich Buda
formation in Dimmit County, TX. The complete 2013 capital program is being
finalized for approval by the Company’s Board of Directors.
Under the preliminary capital program the Company estimates a 2013 year-end
crude oil and liquids production mix of approximately 55% of total production.
Crimson will continue to maintain a prudent hedging program to mitigate
commodity price fluctuations in 2013 and has secured a WTI price floor of
$101.25 per barrel on 168,000 barrels and a Brent price floor of $107.44 per
barrel on 297,000 barrels, which represents over 80% of forecasted 2013
production of oil and the heavies portion of liquids from currently producing
Crimson Exploration is a Houston, TX-based independent energy company engaged
in the exploitation, exploration, development and acquisition of crude oil and
natural gas, primarily in the onshore Gulf Coast regions of the United States.
The Company currently owns approximately 100,000 net acres onshore in Texas,
Louisiana, Colorado and Mississippi, including approximately 19,000 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 DJ Basin of Colorado, and approximately 5,300 net acres in the
Haynesville Shale and Mid-Bossier gas plays and James Lime gas/liquids play in
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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