Caza announced the Company's final results for the year ended December 31, 2010. Caza has hydrocarbon exploration, development and production assets in Texas, New Mexico and Louisiana, USA.
2010 highlights include:
W. Michael Ford, Chief Executive Officer commented, "We are encouraged by our positive results in 2010. In particular, the last quarter was very good with material increases in both production and revenues and a successful raise. Caza increased its production volumes by 47% and revenues by 88% for Q4 2010 as compared to Q3 2010. These increases were the result of our successful drilling operations during the last half of the year. Our proven reserves more than doubled during the course of the year. The net present value of the estimated future net revenue (discounted 10%) of our proved reserves also improved as compared to the prior year-end, increasing by 56.6%. We entered 2011 well funded with a cash and cash equivalents balance as of December 31, 2010, of approximately US $33.9 million, and we plan to deploy a significant portion of these funds on drilling in the coming months. We believe that with our cash reserves, Caza is well placed to execute a strategy of revenue and reserves growth.
We made good progress in the Permian Basin at our Windham Wolfberry project in Upton County, Texas. Under the Company's farmout agreement with Devon, two wells were drilled: the Caza 158 #1, which averaged a gross rate of 100 bbl/d of oil in December 2010 from just two of five potential pay zones; and the Caza 162 #1, which is in the completion phase. Since the end of the year, Devon has also drilled the Caza 158 #2 well, which is also in the completion phase with a possible fourth well planned for June 2011. This project fully developed could yield 16 locations assuming 80 acre spacing.
In Wharton County, Texas, Caza drilled and completed two wells: the Matthys-McMillan #2 in the Yegua formation; and the O.B. Ranch #1 in the Cook Mountain formation. We believe the success of these wells has opened new opportunities for Caza in the Yegua and Cook Mountain trends. Accordingly, Caza is steadily building a position in the new play and is currently reprocessing the Wharton data. Integrating recent results into the reprocessing will help to better plan future prospect development, and we expect further drilling in the near future.
We also expect to commence operations on a new Permian Basin project soon, our San Jacinto Wolfberry (oil) project in Midland County, Texas. Caza will be the operator of the project, and we have acquired an 85% gross working interest in approximately 480 acres with five proved undeveloped locations.
In summary, the Company has established a diverse portfolio of attractive projects, which can be progressed in the short term."
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