Caza Updates on New Mexican Drilling Program
Caza Oil & Gas has updated on its activities in the Abo/Wolfcamp horizontal oil play in New Mexico, USA, where it has now drilled four wells.
The first two wells, the Moore Bailout 11 State #1 and Lucky Penny 10 State #1 wells, as previously reported, were discoveries and both continue to produce at rates of approximately 20 barrels per day.
The Bada Bing 23 State #1, the third well in the program, was drilled to a total measured depth of 12,835 feet with a horizontal leg of 4,129 feet. The well encountered Abo/Wolfcamp dolomitic and limestone formations and a multi stage fracture stimulation was completed on 23 December 2009. The well continues to flow back completion fluid, but at this stage no hydrocarbons have been evident in the fluid recovered. The fourth well in the Abo/Wolfcamp horizontal play, Moore Cowbell 27 State #1, has been drilled to a total measured depth of 10,083 feet with a horizontal leg of 1,197 feet. Although core data indicates a 14 foot interval in the Abo zone from 8,679-8,693 feet to be pay, the horizontal leg of the well did not encounter any producible reservoir zones. Caza and its partner Wise Oil No. 8, Ltd. are planning a vertical completion within the Abo zone.
Under the definitive participation agreement between the Company and Endeavour International Corporation ("Endeavour"), Endeavour has the option as to whether to elect to participate in the Company's prospects and has informed the Company that, for strategic reasons, it will not participate in any of the Company's wells in Texas and Louisiana and is terminating the participation agreement with effect from 8 April 2010. The Company is currently in discussions to farm out these prospects and is confident that it will secure partners to drill these assets.
The Company is planning to spud a development well, the Matthys McMillan GU #2, around the middle of February 2010. Caza holds a 19.617% working interest (14.712% net revenue interest) in the well. The location directly offsets the Matthys McMillan GU #1 well that was completed by Caza in July 2007 and has produced approximately 2.4 BCFGE to date.
Mike Ford, CEO and President of the Company, commented, "The result from the Moore Cowbell 27 State #1 well is disappointing and we await the final evaluation of the Bada Bing 23 State #1 well. Caza was carried in each of the four wells in the Abo/Wolfcamp play which has mitigated the Company's financial exposure. We are evaluating the results of the program to date to establish the viability of the play and our acreage position.
"It is our current intention to focus our resources on the deeper wells scheduled to be drilled in Texas and Louisiana starting with the Matthys McMillan GU #2 well which will be spudded shortly."