Caza O&G provided an operational update on the Company's Bongo Property concerning the O.B. Ranch #2 development well in Wharton County, Texas.
Caza, as operator, announced that the O.B. Ranch #2 development well has reached its target depth of 13,210 feet and electric logs have been obtained through the target depth. The logs indicate potential pay in the Frio, Yegua and targeted Cook Mountain formations.
Data from the logs and core samples from the well have confirmed Caza's geologic and seismic modeling, which hypothesized that the O.B. Ranch #1 discovery well (which originally targeted a deeper Wilcox structure) was producing from the fringe of a more extensive Cook Mountain sand package. The O.B. Ranch #2 development well has been drilled closer to what Caza believes to be the center of the Cook Mountain anomaly with the aim of gaining valuable geologic knowledge of the Bongo/Cook Mountain sand and the regional Cook Mountain sand picture, while adding further production to the Company's portfolio.
The O.B. Ranch #2 is in a higher structural position than the O.B. Ranch #1 well, and log and seismic data support thicker, better sorted, potential pay sands with better porosity within the Cook Mountain section than those found in the O.B. Ranch #1. Due to concerns over existing downhole conditions, Caza was unable to run the micro imaging tool used in the O.B. Ranch #1 well, which helps to identify net effective pay. However, the Company was able to run a high resolution triple combination logging tool, which was more than adequate to define lithology and potential pay sections within the wellbore.
Caza is currently running production casing and preparing the O.B. Ranch #2 well for further completion operations in the Cook Mountain. The completion procedure will include a fracture stimulation program, which is scheduled for the end of July, 2011. The initial rate will be announced following completion of the fracture stimulation procedure.
The log data also indicates potential pay in the shallower Frio and Yegua formations at approximately 5,530 feet and 9,000 feet respectively.
Caza currently has a 45.28% working interest and an approximate 33.51% net revenue interest in the Bongo property and wells.
W. Michael Ford, Caza's Chief Executive Officer commented, "We are very pleased with the results of the O.B. Ranch #2 well. The data from this well has confirmed our scientific model and will be instrumental in efficiently developing the Bongo property. Additionally, Caza is beginning to receive the initial data from our proprietary seismic reprocessing in this area, which looks very promising. The Company currently has several exploration prospects under lease that should benefit from this newly gathered data as should Caza's future exploratory prospect development in Wharton County."
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