Caza All Smiles over San Jacinto Property
Caza Oil & Gas, Inc. provided an operational update regarding its San Jacinto Property in Midland County, Texas.
Shareholders will be pleased to note that Caza has now successfully completed the last phase of its engineering evaluation and operations to commingle all pay zones in the Caza Elkins 3401 and 3402 wells, which are both performing on prognosis and as expected. However, even more favourable investment opportunities and attractive recent Wolfberry properties' sale prices have caused management to explore the possibility of divesting the San Jacinto Property. As a result, Caza has listed the property with the Oil & Gas Asset Clearinghouse, a leading oil and gas property marketing and advisory firm, to determine the level of interest in the current market. Caza believes that an orderly marketing of the property is most likely to achieve a desirable valuation but, should forthcoming offers not meet or exceed Caza's internal matrix for return on investment and capital employment, management remains under no obligation to sell the property. If an agreement to sell San Jacinto is ultimately reached with a buyer, Caza intends to use the proceeds to further existing assets and to pursue new opportunities in order to add additional shareholder value through continued investment in suitable properties.
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.
Caza's management regularly conducts ongoing reviews and appraisal programs with regard to both its existing asset base and new, unsolicited opportunities. Some deals present themselves in the form of asset swaps or farm-ins, while others include the potential acquisition of multiple properties and existing corporate entities. Caza remains actively involved in reviewing and grading such opportunities on an ongoing basis, and management remains keen to continue growing the Company's asset base and production profile using a variety of means.
W. Michael Ford, Chief Executive Officer commented, "We are very pleased with the progress made at San Jacinto and recognize that there is a strong and growing market for this type of asset. A successful exit would have the potential to unlock the increased value that we have created at San Jacinto. At present, we are exploring the options and opportunities available to us with the successful sale of this property and will look to further update shareholders as and when there are further developments."