Monday, 24 June 2013

Caza Oil & Gas heartened by Bone Spring progress

Caza Oil & Gas (LON:CAZA, TSE:CAZ) has started drilling on Caza Ridge 14 State #4H, the second well on its Copperline Bone Spring property in Lea County, New Mexico.
Drilling on the horizontal well started on 15 June. The well is a direct offset to the successful Caza Ridge 14 State #3H well. The primary target is the third Bone Spring Sand interval with potential secondary targets in the Brushy Canyon, Avalon Shale, and first and second Bone Spring Sands.
Caza has a 58.75% working interest, which roughly equates to a 44.80% net revenue interest, in the Caza Ridge 14 State #4H well.
The company has also been busy elsewhere in New Mexico, and has provided updates on its Lennox, Madera and Roja properties.
The fracture stimulation on the Lennox State Unit 32 #2H horizontal Bone Spring well was successful, the company reported. Although stimulation of the first Bone Spring interval did not produce commercial rates, results were better on the second and third intervals, with oil and natural gas being produced at commercial levels.
Caza has a 40.00% working interest before pay-out, which equates to a 31.08% net revenue interest, and a 50.00% working interest after pay-out (38.85% net revenue interest) in the Lennox State Unit 32 #2H well, and will participate with a 50.00% working interest in all subsequent wells drilled by Caza on the Lennox property.
Meanwhile, the initial well at the Madera property in Lea County is currently drilling the horizontal section of the well. Based on analysis of log data, OXY, the operator, will begin drilling the lateral section of the well through the primary objective third Bone Spring Sand interval to a total measured depth of round 16,839 feet.
Caza has a 20% working interest (15.60% net revenue interest) in the Madera 35 Fed #1H well and the Madera property.
Finally, the initial well on the Roja property, also in Lea County, has reached the intended total measured depth of around 13,568 feet. The well was recently fracture stimulated in multiple stages and is currently flowing back to clean up.
Caza has a 20.00% working interest (15.60% net revenue interest) in the Madera 17 Fed #1H well and the Roja property.
“The first Caza Ridge well at Copperline was a very good result, which we hope to duplicate with the recently commenced Caza Ridge development well. The Lennox well has tested commercial for oil and natural gas in two of the three Bone Spring Sand intervals, and we look forward to completing the artificial lift system and bringing the well online very soon. The OXY operated Madera and Roja wells are progressing nicely, and we look forward to providing results on these wells and bringing them online in the near future, as well,” said Michael Ford, chief executive officer of Caza.
“Lennox, Madera and Roja provide the company with good development potential across expansive lease areas. This should mean repeatable success across multiple oil and liquids-rich zones in the broader Bone Spring play. The stacked pay potential for oil and liquids-rich gas is what makes this play so intriguing. It’s also the reason management has focused efforts on the play, and what should ultimately make the play successful for Caza and create value for our shareholders,” he added.

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