Caza Oil & Gas, Inc. announced that exploration wells on its Wilcox 116 Property in Wharton County, Texas and the Lynch Property, in Lea County, New Mexico both successfully encountered gas and the Company expects to bring both wells into production following completion and tie-in to gathering systems.
Located in Wharton County, Texas, the Jonell Cerny gas unit #1 well commenced drilling on January 15, 2008 and reached a total depth of 16,510 feet on March 3, 2008. Petrophysical logs were run on March 8, 2008 and analysis of the data indicates the well encountered Wilcox Sand pay at multiple intervals from 13,500 feet to 16,400 feet. Completion operations are planned to commence around April 9, 2008 pending pipeline connection into the gathering system.
The sands targeted by this well are currently producing in Caza's nearby Matthys-McMillan well. The success of this well would establish numerous development locations on the Wilcox 116 Property. Caza is the operator of this well and drilled and earned a 29.9% working interest (which reduces to a 27.8% working interest after completion of the initial well and a corresponding 20.9% net revenue interest).
Located in Lea County, New Mexico, the Mud Slide Slim "15" Federal Com. #1 commenced drilling on January 12, 2008 and reached a total depth of 13,513 feet on March 2, 2008. Petrophysical logs were run on March 3, 2008 and analysis of the data indicates the well encountered Morrow Sand pay at multiple intervals from 13,040 feet to 13,160 feet. Completion operations are planned to commence around May 6, 2008 pending a pipeline connection into the gathering system.
Caza has earned a 40.0% working interest (31.3% net revenue interest) before payout which reduces to a 27.8% working interest (20.9% net revenue interest) after payout of the initial well in this property.
Mike Ford, Chief Executive Officer of the Company, commented: "We are delighted to be able to report positive news about these exploration wells and look forward to updating shareholders on initial flow rates when operations are completed. Successful production from these wells will create additional low-risk drilling opportunities which we believe will provide future growth in production, cash flow and shareholder value."
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