Caza Makes Headway in 3Q11



Caza provided its unaudited financial and operational results for the nine months ended September 30, 2011.

Third Quarter Financial Highlights

  • Caza's production increased 66% to 21,476 Boe for the three-month period ended September 30, 2011, from 12,949 Boe for the comparative period in 2010. This represents an average daily production rate increase of 92 boepd for the three month period ended September 30, 2011, 233 boepd as compared to 141 boepd for the comparative period. 3Q 2011 production was 3,346 Boe higher than 2Q 2011 (which was 18,130 Boe), due to additional wells coming on line.
  • Caza had a cash balance of $16,031,398 as of September 30, 2011, as compared to $3,605,393 at September 30, 2010, and $33,885,900 at December 31, 2010. The increase is attributable to the placing announced on November 15, 2010. Caza's working capital balance at September 30, 2011, was $14,146,741 as compared to $20,870,708 at June 30, 2011. The decrease in Caza's working capital balance primarily represents the investments made to drill the O.B. Ranch #2 development well in Wharton County, Texas, the Caza Elkins 3401 and 3402 wells in Midland County, Texas, and the Caza 158 #3 in Upton County, Texas.
  • Revenues from oil and gas sales increased 152% to $995,466 for the three-month period ended September 30, 2011, up from $395,725 for the comparative period in 2010. The increase in revenues was primarily due to the additional wells brought on since the comparative period. The average combined price received by Caza increased 52% to $46.35 per Boe during the three-month period ended September 30, 2011, from $30.56 per Boe during the comparative period in 2010.
  • General and Administrative expenses were $1,297,623 ($1,260,103 net of reimbursements) for the three-month period ended September 30, 2011, as compared to $979,466 ($937,352 net of reimbursements) for the comparative period in 2010. The change in General and Administrative costs are a result of additional costs incurred for geological and geophysical work associated with Atchafalaya Bay, the Bol Mex merge area and Southeast New Mexico

Third Quarter Operational Highlights

  • Hite Offset Property, Wharton County, Texas. Operations are continuing on the Caza McMillan #1 re-entry well to test the Yegua 9,650 sand. Caza will update the market accordingly upon completion of this well.

Caza currently has a 42.53% working interest and a 31.05% net revenue interest in the Caza McMillan #1 well.

  • San Jacinto Property, Midland County, Texas. As previously announced, the Caza Elkins 3401 and 3402 wells have been fracture stimulated and are producing across multiple pay intervals including: the Dean, Wolfcamp, Strawn, Atoka and Mississippian formations with additional Spraberry intervals to be fracture stimulated at a later date. The 3402 well is scheduled to be fracture stimulated in the Spraberry in December 2011, which should bolster the producing rates associated with this well. Caza has five additional proven undeveloped locations to drill on the San Jacinto property. The next two wells on this property were planned for the fourth quarter of 2011, however, the scheduling of these wells may be subject to change in the context of a more comprehensive drill plan for 2012.

Caza currently has an 85% working interest in the Caza Elkins 3401 well with a 63.75% net revenue interest. In all subsequent wells on the San Jacinto property, including the Caza Elkins 3402 well, Caza will have a 75% working interest and a 56.25% net revenue interest.

W. Michael Ford, Chief Executive Officer commented, "Caza continued its positive operational and financial results for the third quarter of 2011. The recent addition of Randy Nickerson, as Vice President, Exploration, will help focus the Company's strategy for growth, which is focused on delivering increased production levels, cash flows and proven reserves through the development of currently producing assets and the continued drilling of our diverse project inventory. We are well funded and have a good mix of projects, which we are in the process of risking in order to plan our drilling strategy for the coming year."