Crimson Exploration announced the commencement of drilling operations on the Mosley #1H (~86% WI), its first well targeting the oil-rich Woodbine formation in Madison County, Texas, the successful completion of the Schwarz #3 (64% WI) in Liberty County, Texas and its 2012 capital program of $74 million that is currently planned to include 15 gross wells (13 operated) focusing on the oil and/or liquids-rich Eagle Ford Shale and Woodbine formations.
The Mosley #1H (~86 % WI) recently began drilling operations, targeting the Woodbine formation, and is planned for a total measured depth of 16,900 feet, including an 7,500 foot lateral with 20 - 24 stages of frac. Drilling of this well is anticipated to take approximately 35 days, completion operations are expected to commence mid-February and initial production, given success, is expected to begin in early March. Industry activity has accelerated in the area with one private company having a very successful drilling program immediately to the west/southwest of our 15,500 net acre position in Madison and Grimes Counties, and larger industry players competing for acreage positions to the north and east of our position. Given success of the Mosley #1H, we expect to have a rig active for the balance of 2012 drilling Woodbine wells in this area.
In Liberty County, Texas, the Schwarz #3 (64% WI) commenced production at a gross daily rate of 9.3 Mmcfe, or 6.3 Mmcf, 87 barrels of oil and 412 barrels of condensate on a 16/64th choke and 9,593 psi of flowing tubing pressure. The well was drilled to a total vertical depth of 14,750 feet and completed in the Lower Cook Mountain formation.
2012 Capital Budget
Crimson's 2012 capital budget is currently targeted at approximately $74 million and is designed to continue our transformation from a predominately natural gas producer to a more balanced oil/gas profile by drilling our opportunities in the Eagle Ford and Woodbine formations. Currently included in these plans are ten wells targeting the oil-rich Woodbine formation in Madison and Grimes counties, Texas and five wells in the Eagle Ford Shale formation in Karnes, Zavala, Dimmit and Bee counties, Texas.
Though Crimson currently has approximately $85 million of availability on its revolving credit facility, the Company plans to limit its capital budget to its internally generated cash flow for the year. The amount ultimately to be spent during the year, and the projects pursued, will be constantly monitored for appropriate revision, upward or downward, based on actual drilling success, production and cash flow.
We will continue to monitor industry activity in the oil weighted Niobrara Shale in the DJ basin of Colorado and the liquids-rich James Lime Shale play in East Texas. Planned drilling activity by large operators in and around our positions in both plays, allows Crimson the ability to have each play de-risked prior to having to expend drilling capital. Results of these wells will determine Crimson's strategy and activity level in these plays in 2012; and given competitor success, we may adjust our capital budget to capitalize on opportunities on our acreage positions.
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