According to the drilling program's operator, results of the study of well logs indicate that the Deep Lake Well No. 1 contains substantial gas reserves. The operator also reports that it anticipates completion of the well and gas production to be initiated within 45-60 days, if not sooner (subject to equipment availability and weather).
Under the terms of the participation agreement announced earlier this year, Aztec is participating as a minority interest holder in drilling and completion of two wells in excess of 13,500 feet each. The first well (Deep Lake Well No. 2), which cost approximately $3.5 million to drill to a vertical depth of approximately 14,300 feet, had a spud (start) date of April 15, 2005. The second well (Deep Lake Well No. 1) was drilled to an approximate vertical depth of 13,600 feet. According to the program's operator and several consulting geologists, both well sites targeted formations that are considered to contain very high volumes of natural gas plus some condensate. The Deep Lake field has already produced in excess of one trillion cubic feet of gas to date.
"Progress on this second well (Deep Lake Well No. 1) has been exceptional and Aztec is excited about the potential it holds. The operator has indicated that there are significant gas reserves that could be tapped in a matter of weeks. Additionally Aztec is extremely pleased with the substantial reserves already logged in the first well of the program (Deep Lake Well No. 2). Aztec is participating in this project with some very accomplished industry players and is encouraged about the potential results of this program. Aztec continues to forge ahead with our plans to diversify our holdings, with plans to acquire interests in a variety of promising oil and gas properties and prospects, some which should be announced very soon. We will continue to strive to build on our strategy to achieve long-term portfolio diversification goals and long-term value for our shareholders," says Dr. Kenneth Lehrer, Chief Financial Officer of Aztec Oil & Gas, Inc.
In additional to the above referenced programs, Aztec Oil and Gas acquired its 31.283% interest in Z2, LLC in 2004. Z2 LLC owns 100% of the working interest in the 7,200+ acre Big Foot oil field in Texas. In the Big Foot field, four new wells have recently been drilled to approximate target depths of 4,000 feet each; Well 337 A was recently fraced in the Upper B Zone; and the remaining three new wells are expected to also be fraced in the Upper B Zone within the next several weeks. In addition to the two Deep Lake Wells mentioned above in this press release, Aztec also recently acquired a minority interest in a drilling project in the South Deep Lake field, also in Cameron Parish, Louisiana. That project involves an initial single well to be drilled to a target depth of over 19,000 feet. Aztec is also participating in a drilling program in the Barnett Shale play (located in Cooke, Wise and Montague Counties, Texas); and two drilling projects in Wharton County, Texas. The company will additionally soon be announcing participation in multiple well programs in two other states.
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