Caza Oil & Gas Provides Operational Update
HOUSTON, TEXAS -- (Marketwired) -- 04/04/13 -- Caza Oil & Gas, Inc.
(TSX:CAZ)(AIM:CAZA) ("Caza" or the "Company") is pleased to provide
an operational update on the Company's Bone Spring drilling
activities in Southeast New Mexico.
Lennox Property, Lea County, New Mexico. The Lennox State Unit 32 No.
2H horizontal well reached the intended total vertical depth of
approximately 11,850 feet subsurface on March 12, 2013, and log data
was obtained. There were good mud log shows for oil and natural gas
throughout the Bone Spring formation while drilling the vertical
section, notably in the 1st, 2nd and 3rd Bone Spring Sand intervals.
Based on analysis of the log data, Caza and its partners have drilled
the lateral section of the well through the primary objective 3rd
Bone Spring Sand to a total measured depth of approximately 15,914
feet. Caza plans to fracture stimulate ("frac") the lateral section
of the well in multiple stages. Once completed, the well will be
flowed back to establish initial production rates, and the market
will be updated accordingly.
Notwithstanding certain operational issues during drilling, including
a mechanical failure on the rig requiring a replacement drilling rig
to complete the hole, all issues were resolved and the resultant
increase in drill time and well cost are not considered material to
the economics of the well.
Caza has a 40.00% working interest before payout (31.88% net revenue
interest) and a 50.00% working interest after payout (39.85% net
revenue interest) in the Lennox State Unit 32 No. 2H well.
Roja Property, Lea County, New Mexico. Caza has elected to
participate in a proposal from Occidental Petroleum ("OXY"), as
operator, to drill a horizontal Delaware well on the Roja property.
The well is called the Madera 17 Federal #1H and is currently
scheduled for June 2013. Caza has a 20% working interest (16% net
revenue interest) in the Roja property.
Gateway Property, Lea County, New Mexico. The Company completed a
trade on March 25, 2013 with The Blanco Company to acquire a 318 acre
lease to be called the Gateway Property. Gateway will target the Bone
Spring formation and is a nice addition to Caza's Bone Spring
property inventory. Caza has a 100% working interest (77% net revenue
erest) in the Gateway property.
Quail Ridge Property, Lea County, New Mexico. The Quail "16" State
No. 4H horizontal well, operated by Fasken Oil and Ranch, Ltd.
("Fasken") reached total measured depth of approximately 15,605 feet
on January 26, 2013, and was successfully fracture stimulated and
completed in the 3rd Bone Spring Sand on February 15, 2013. The
average daily production rate over the first thirty days was
approximately 828 bbls/d of oil and 947 Mcf/d of natural gas, which
equates to 986 Boe/d. This is the second well completed on this
property to date and is another very good result. The Quail Ridge
wells offset Caza's Lynch property and have helped to further de-risk
the Company's acreage position while providing valuable information
for future drilling at Lynch. Caza has a 0.25% working interest
(0.1875% net revenue interest) in the Quail "16" State No. 4H well.
Company Bone Spring Prospects, Lea and Eddy Counties, New Mexico. The
Bone Spring play in Lea and Eddy Counties, New Mexico, contains
multiple potential pay zones for oil and liquids-rich natural gas,
which include but are not limited to: Delaware, Lower Brushy Canyon,
Avalon Shale, 1st, 2nd and 3rd Bone Spring Sands and Wolfcamp. Caza's
current prospects and properties in the horizontal Bone Spring play
are: Lynch, Forehand Ranch, Forehand Ranch South, Lennox, Copperline,
Mad River, Azotea Mesa, Bradley 29, Two Mesas, Quail Ridge, Chaparral
33, Rover, West Rover, West Copperline, Madera, Roja, and Gateway.
The Company has acquired approximately 4,100 net acres in the play to
date. Leasing and drilling activity continues to be competitive in
the play, and initial producing well rates continue to improve with
technological advances in drilling and frac designs. The Company is
well positioned in the play, and continues to exploit opportunities
to build on its current acreage position.
W. Michael Ford, Chief Executive Officer, commented:
"We are pleased to provide this operational update after announcing
the Company's positive year-end results last week. We made
significant progress in 2012, and after laying the groundwork for
continued success in the Bone Spring play, we look forward to
advancing the Company's prospects and properties during the course of
2013, including the successful completion of the Lennox well."
"The log results from the Lennox well are in-line with predrill
expectations and have confirmed the presence of multiple potential
pay zones containing oil and liquids-rich natural gas. After
difficulties with the original rig, we are happy to have reached our
intended total measured depth in the 3rd Bone Spring Sand interval.
We look forward to scheduling the frac and completing the well in
order to bring it online in the near future. Given success, this well
will help establish a substantial development program, as the Lennox
Unit contains 1,920 acres."
"We are also very pleased to have acquired the lease at Gateway. No
reserves were assigned to this property at year-end, because it is
too new. However, the Company believes the lease has good reserve
potential and expects to drill a test well at Gateway during 2013."
"Finally, we are looking forward to participating in the Roja well
with OXY. The Delaware is another formation being successfully
exploited for oil and liquids-rich natural gas as part of the broader
horizontal Bone Spring play. Multiple potential pay zones are what
make this play such an exciting investment proposition."
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).
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
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",
"hope", "project", "predict", "potential", "intend", "could",
"might", "should", "believe", "develop", "test", "anticipation",
"looks to be" and similar expressions. In particular, information
regarding drilling information to be obtained from drilling
operations and intended completion operations contained in this news
release constitutes forward-looking information within the meaning of
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.
Testing of the wells described in this press release has not been
completed, and the tests disclosed herein are not necessarily
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.
GLOSSARY OF ABBREVIATIONS
bbl one barrel, each barrel Mcf one thousand cubic feet
representing 34.972 Imperial
gallons or 42 U.S. gallons
bbl/d barrels per day Mcf/d one thousand cubic feet
boe barrels of crude oil equivalent boe/d barrels of crude
derived by converting natural gas equivalent per day
to crude oil in the ratio of six
thousand cubic feet of natural gas
to one barrel of crude oil
The term boe may be misleading, particularly if used in isolation. A
boe conversion of six thousand cubic feet per one 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
The Toronto Stock Exchange has neither approved nor disapproved the
information contained herein.
Caza Oil & Gas, Inc.
+1 432 682 7424
Caza Oil & Gas, Inc.
+65 9731 7471 (Singapore)
Cenkos Securities plc
+44 20 7397 8900 (London)
Cenkos Securities plc
+44 131 220 6939 (Edinburgh)
VSA Capital Limited
+44 20 3005 5004
VSA Capital Limited
+44 20 3005 5012
+44 20 7920 2330
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