HOUSTON, TEXAS -- (Marketwired) -- 04/04/13 -- Caza Oil & Gas, Inc. (TSX: CAZ)(AIM: CAZA) ("Caza" or the "Company") is pleased to provide an operational update on the Company's Bone Spring drilling activities in Southeast New Mexico.
Lennox Property, Lea County, New Mexico. The Lennox State Unit 32 No. 2H horizontal well reached the intended total vertical depth of approximately 11,850 feet subsurface on March 12, 2013, and log data was obtained. There were good mud log shows for oil and natural gas throughout the Bone Spring formation while drilling the vertical section, notably in the 1st, 2nd and 3rd Bone Spring Sand intervals. Based on analysis of the log data, Caza and its partners have drilled the lateral section of the well through the primary objective 3rd Bone Spring Sand to a total measured depth of approximately 15,914 feet. Caza plans to fracture stimulate ("frac") the lateral section of the well in multiple stages. Once completed, the well will be flowed back to establish initial production rates, and the market will be updated accordingly.
Notwithstanding certain operational issues during drilling, including a mechanical failure on the rig requiring a replacement drilling rig to complete the hole, all issues were resolved and the resultant increase in drill time and well cost are not considered material to the economics of the well.
Caza has a 40.00% working interest before payout (31.88% net revenue interest) and a 50.00% working interest after payout (39.85% net revenue interest) in the Lennox State Unit 32 No. 2H well.
Roja Property, Lea County, New Mexico. Caza has elected to participate in a proposal from Occidental Petroleum ("OXY"), as operator, to drill a horizontal Delaware well on the Roja property. The well is called the Madera 17 Federal #1H and is currently scheduled for June 2013. Caza has a 20% working interest (16% net revenue interest) in the Roja property.
Gateway Property, Lea County, New Mexico. The Company completed a trade on March 25, 2013 with The Blanco Company to acquire a 318 acre lease to be called the Gateway Property. Gateway will target the Bone Spring formation and is a nice addition to Caza's Bone Spring property inventory. Caza has a 100% working interest (77% net revenue interest) in the Gateway property.
Quail Ridge Property, Lea County, New Mexico. The Quail "16" State No. 4H horizontal well, operated by Fasken Oil and Ranch, Ltd. ("Fasken") reached total measured depth of approximately 15,605 feet on January 26, 2013, and was successfully fracture stimulated and completed in the 3rd Bone Spring Sand on February 15, 2013. The average daily production rate over the first thirty days was approximately 828 bbls/d of oil and 947 Mcf/d of natural gas, which equates to 986 Boe/d. This is the second well completed on this property to date and is another very good result. The Quail Ridge wells offset Caza's Lynch property and have helped to further de-risk the Company's acreage position while providing valuable information for future drilling at Lynch. Caza has a 0.25% working interest (0.1875% net revenue interest) in the Quail "16" State No. 4H well.
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