Caza Oil & Gas starts drilling at “high impact” Bongo oil and gas prospect in Texas

US focused oil and gas junior Caza Oil & Gas (AIM: CAZA) has commenced drilling the O.B. Ranch#1 well, which is the initial test well on the Bongo prospect in Wharton county, Texas.
The well is designed to drill to a total depth of approximately 16,000 feet, which it will reach in approximately 60 days. Caza expects the well to encounter multiple, potential, hydrocarbon bearing reservoir sections.
Bongo is a significant 3-D seismically defined, three-way closure in the Wilcox formation. Caza has previously farmed out a portion of its 65% participating interest in Bongo to Verus Investments Limited and Singular Oil & Gas, Inc, retaining a 40% working interest in the O.B. Ranch#1 well with an approximate 30% net revenue interest.

“We are very pleased to announce the commencement of drilling operations on the O.B. Ranch #1 well on our Bongo prospect.  Bongo has high-impact potential for Caza and is in line with our refocus toward exploration activities in Texas and Louisiana,” said chief executive of Caza Oil & Gas Michael Ford.
Broker Westhouse Securities noted that the start of drilling was consistent with the company’s statement from 2 June, when it said that drilling on the “high impact” prospect was expected to commence within two weeks. It simultaneously announced the divestment of its non-operated Glass Ranch property to Viejo Energy I, LLC doing business as Momentum Energy Corporation for US$1.4 million in cash.
Caza has previously successfully farmed out up to 75% of the Windham Wolfberry property, which covers approximately 1,318 net acres in the Crane and Upton counties to Devon Energy Production. It has also entered into an agreement with Pass Petroleum for its Arran prospect in Louisiana’s Acadia Parish, naming Caza the operator and requiring Pass to fund 100% of the initial appraisal costs attributable to Caza's 50% working interest in the prospect, to earn a 37.5%.
Also in May, Caza agreed the details of a separate work programme, to be carried out alongside Endeavour International Corp (NYSE: END; LSE: ENDV). The parties initially signed a participaton agreement in 2009, which allows Endeavour to earn up to 75% of Caza’s interest in a number of properties.
Shares in Caza rose 3.7% on the news.

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