Resaca's 3rd Refrac Underway in New Mexico

Resaca announced an update on its $13 million capital program announced on February 2, 2011.

Cooper Jal Unit ("CJU")

Phase II of the Company's refrac program includes refracs on fifteen wells at CJU in New Mexico. As of March 10, 2011, two of the planned refracs - those on the CJU 154 and the CJU 225 - have been completed, and a third is underway. Resaca has secured the dedicated services of a local stimulation contractor to complete the remaining twelve refracs. The Company anticipates that Phase II of the CJU refrac program will be completed by the end of May 2011. 

The second major effort at CJU involves the clean out and stimulation of seventeen water injection wells ("WIW") and the installation of a new horizontal pump with a goal of increasing the water injection rate at CJU to 25,000 barrels of water per day ("BWIPD"). To date, eight water injection well cleanouts have been completed. The remaining nine cleanouts are currently scheduled to be completed by early April 2011. 

Additional planned work at the CJU includes the re-entry of nine plugged and abandoned wells. Five of the nine wells to be re-entered will be returned to injector status and four will be converted to producing wells. The first two re-entry procedures are currently in progress. Resaca's CJU program includes upgrading artificial lift capacity at fourteen wells. Work on this effort has begun with the installation of the first of two planned installations of progressive cavity pumps. Finally, Resaca has made progress on several efforts to upgrade and improve infrastructure at the CJU including upgrading test facilities at the CJU satellite and an upgrade of electrical service to the unit. 

Jordan San Andres Unit ("JSAU") 

The Company installed a higher capacity injection pump on Tract 79 of the JSAU on 2 March 2011. The new pump should increase injection rates at JSAU. Improving water injection rates is a key first step in the Company's plan to re-activate a waterflood at the JSAU field. The next step at JSAU is to clean out and stimulate four water injection wells. These jobs are scheduled to be completed by late April 2011. 

In addition, the Company plans to deepen four existing JSAU production wells into the lower San Andres interval and re-work select existing wells with previously plugged zones. The Company believes that these plugged zones may be capable of additional production. One such project was conducted on the JSAU 7911 in early February of this year and yielded positive results.

Edwards Grayburg Unit ("EGBU") 

The Company's overall objective at EGBU is to increase the volume of water being injected in the current waterflood at the unit so as to shift currently classified probable reserves into the proved and producing category. To that end, Resaca has installed a new injection pump at the field and testing of the equipment is underway. A second key task at EGBU is the cleanout and stimulation of four water injection wells. The first three WIW clean outs and stimulations have been completed. Work on the fourth, the EGBU 717W, is currently underway. In April, the Company expects to initiate the next phase of our program at EGBU, which is the clean out and stimulation of eight low volume, producing wells. 

Grand Clearfork Unit ("GCFU") 

Current plans for work at GCFU include the recompletion of the GCFU 3513 into the Lower Clearfork zone and a workover on the GCFU 3507 WIW. This work is not yet scheduled, but will likely occur in late summer of 2011. 

Minor Fields 

Resaca is in different planning stages on a variety of projects at the Kayser, Iatan, McElroy, Cotton Draw and BTBN fields including remedial infrastructure work, waterflood reactivation and re-completions into new pay zones. Much of this work will begin in the second half of 2011.