HOUSTON, TEXAS--(Marketwire - Oct. 30, 2012) - Caza Oil & Gas, Inc. ("Caza" or the "Company") (TSX:CAZ)(AIM:CAZA) is pleased to provide an operational update on the Company's drilling activities in southeast New Mexico.
Forehand Ranch Prospect, Eddy County, New Mexico. The Forehand Ranch 27 State Com No. 1H horizontal well has reached the intended total vertical depth of approximately 9,450 feet subsurface and log data and core samples have been obtained. Based on analysis of the log and core data, Caza and its partners are now preparing to commence drilling the horizontal section of the well through the primary objective 2nd Bone Spring Sand targeting the interval centered at 7,350 feet measured depth. The horizontal section will be approximately 4,360 feet in length, and the well is scheduled to be drilled to a total measured depth of approximately 11,961 feet. Once the horizontal section is complete, the well will be fracture stimulated, and the market will be updated accordingly.
There were good mud log shows for oil and natural gas throughout the Bone Spring formation while drilling the vertical section, notably in the Avalon Shale and 1st, 2nd and 3rd Bone Spring Sands along with shows in the shallower Delaware and Lower Brushy Canyon and the deeper Wolfcamp formations.
Caza has a 54.83% working interest before payout (42.02% net revenue interest) and a 63.00% working interest after payout (48.27% net revenue interest) in the Forehand Ranch 27 State Com No. 1H well.
Copperline Prospect, Lea County, New Mexico. The Caza Ridge 14 State No. 3H horizontal Bone Spring well has been fracture stimulated in twelve stages. The frac occurred ahead of schedule, and the Company has already begun initial flow back of the well to recover frac fluids and hydrocarbons. Horizontal Bone Spring wells require large fracs and may take up to three weeks post frac to establish a stabilized flow rate. Wells on trend usually take up to a week or more before observing meaningful hydrocarbon production during frac fluid recovery. Once a stabilized flow rate has been established, the market will be updated accordingly.
Caza has a 45% working interest (35.213% net revenue interest) before payout and a 58.75% working interest (45.972% net revenue interest) after payout in the Caza Ridge 14 State No. 3H well.
The Bone Spring formation in Lea and Eddy Counties, New Mexico, contains multiple potential pay zones for oil and liquids-rich natural gas. Caza's current prospects in the horizontal Bone Spring play are Lynch, Forehand Ranch, Lennox, Copperline, Mad River, Azotea Mesa, Bradley 29, Two Mesas and Quail Ridge. The Company is well positioned with approximately 3,300 net acres in the play, and management continues to monitor opportunities to build on Caza's current acreage position.
W. Michael Ford, Chief Executive Officer commented:
"We are pleased to have reached total vertical depth on the Forehand Ranch well on schedule. The log and core data have confirmed the presence of multiple potential pay zones containing oil and liquids-rich natural gas. We look forward to completing the horizontal section of the well and scheduling a frac job in order to complete the well and bring it on line in the near future."
"We are also pleased to have secured an early frac date for the Caza Ridge well. All twelve stages went off successfully, and we hope to provide post frac production results in the coming weeks."
Caza is engaged in the acquisition, exploration, development and production of hydrocarbons in the following regions of the United States of America through its subsidiary, Caza Petroleum, Inc.: Texas and Louisiana Gulf Coast (on-shore), and the Permian Basin (West Texas and Southeast New Mexico).
In accordance with AIM Rules - Guidance Note for Mining, Oil and Gas Companies, the information contained in this announcement has been reviewed and approved by Anthony B. Sam, Vice President Operations of Caza who is a Petroleum Engineer and a member of The Society of Petroleum Engineers.
Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Such information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "schedule", "continue", "estimate", "expect", "may", "will", "hope", "project", "predict", "potential", "intend", "could", "might", "should", "believe", "develop", "test", "anticipation", "looks to be" and similar expressions. In particular, information regarding drilling information to be obtained from drilling operations and intended completion operations contained in this news release constitutes forward-looking information within the meaning of securities laws.
Implicit in this information, are assumptions regarding the success and timing of drilling operations, rig availability, projected revenue and expenses and well performance. These assumptions, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual future operations, operating results and economic performance of the Company are subject to a number of risks and uncertainties, including general economic, market and business conditions and could differ materially from what is currently expected as set out above. Testing of the wells described in this press release has not been completed, and the tests disclosed herein are not necessarily indicative of long-term performance or of ultimate recovery.
For more exhaustive information on these risks and uncertainties you should refer to the Company's most recently filed annual information form which is available at www.sedar.com and the Company's website at www.cazapetro.com. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time except as may be required by securities laws.
Information in this news release regarding areas in the Bone Spring Formation in which the Company does not have an interest may not have been prepared by a qualified reserves evaluator or auditor in accordance with the Canadian Oil & Gas Evaluators Handbook. Such information relates to areas which are proximate to areas in which the Company has or intends to acquire an interest and has been provided so that readers may better understand oil and gas activities in areas in which the Company operates or plans to operate. There is no warranty, express or implied, that the results of the Company will be consistent with such information. The Company's results may differ materially and readers should not assume the Company's results will be consistent with those of other operators or use such information for any purpose other than as specified herein.
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.