CAPCO Abandons Galveston Well
CAPCO Energy has decided to abandon the exploratory well at OCS Galveston Block 297. The Company also provides an update on other activities. Capital expenditures for exploration and exploitation activities for the year 2005 will approximate $10 million. A portion of the required funding has already been raised. The Company plans to obtain the remaining funds through sale of equity, divestiture of non core assets and cash flow from properties.
Galveston Block 297. The Company drilled an exploratory well to a depth of 13,500' and after review of the log data has decided to plug and abandon the well. CAPCO had participated in this prospect as the initial terms were very favorable and the potential reserves, if the well had been successful, were in the range of 100 bcf. The cost of drilling the well exceeded our initial estimate due to unexpected subsurface conditions encountered during the drilling of the well. CAPCO has filed for insurance relief on certain of these expenditures.
Brazos Area. CAPCO has a total of 27 wells in this area of which 5 are producing at current production levels of 4.2 mmcfd. The Company has working interests ranging from 35% to 65% in certain of the wells and a 65% working interest in the land holding of approximately 13,000 acres. CAPCO plans to place additional wells on production before the end of the year. The Company has acquired the necessary workover equipment in order to restore many of these wells to production without requiring third party services.
Matagorda Island. CAPCO has a 100% working interest in 6 wells in this area. The Company plans to place the wells on production after certain lease issues have been perfected, and expects to have placed 3 wells on production by the end of the third quarter.
Chandeleur OCS Area/St. Bernard Parish. The Company has after payout interests ranging from 30% to 66% in 11 producing wells. Current production levels are approximately 13 mmcfd. Land holdings are approximately 13,300 gross acres. The potential exists to drill developmental wells in this area.
High Island 196. The Company has an after payout interest of 66% in 4 wells in this property that are currently producing at a rate of approximately 2.2 mmcfd. The land holdings are approximately 5,000 gross acres.
Caplen Field, Galveston County, Texas. CAPCO has a 61% working interest in approximately 6,000 gross acres and 11 wells in this property. Current production, after giving effect to a recently tested well, is about 200 bopd from 2 wells. Additional work is planned to reactivate the balance of the wells.
Slick Waterflood, Creek County, Oklahoma. The Company has a 45% working interest in approximately 2,700 gross acres. Current production from 11 wells approximates 30 bopd. There are a total of 115 wells in the property and CAPCO plans to continue to place additional wells on production for the balance of the year.
Bandwheel, Osage County, Oklahoma. The Company has a 100%
working interest in 1,300 gross acres of land with current
production levels of 26 bopd. There is a total of 120 wells on
the property and the Company plans to continue to place
additional wells on production for the balance of the year.