Caza Oil & Gas, Inc. is pleased to announce an excellent result on the initial Broadcaster well and provide a drilling update on wells at Lennox and Marathon Road. Lennox is a Company operated property, and Broadcaster and Marathon Road are non-operated properties.
Broadcaster Property, Lea County, New Mexico: The Broadcaster 29 Fed #3H horizontal 3rd Bone Spring well (the "29-3H well") reached the intended total measured depth of approximately 15,818 feet in the targeted 3rd Bone Spring Sand interval and was subsequently fracture stimulated in 40 stages beginning on September 7, 2014. Under controlled flowback the producing rates are steadily increasing, and the well produced at a 24 hour gross rate of 2,621 barrels (bbls) of oil equivalent, which is comprised of 2,062 bbls of oil and 3.36 million cubic feet of natural gas, on September 16, 2014. The well was producing on a 46/64ths adjustable choke at 1,850 pounds per square inch flowing casing pressure. This is a very strong well, and the Company anticipates a higher peak rate to be achieved in the coming days. Once a peak rate is achieved, the market will be updated accordingly. Facilities are already in place on the property, and both oil and natural gas are flowing to sales. Caza currently has a 25% working interest (approximate 17.63% net revenue interest) in the Broadcaster 29-3H well and the Broadcaster Property.
The Broadcaster Property is a 320 acre tract adjacent to the Company's West Copperline Property, which also comprises 320 acres. In addition to the producing 3rd Bone Spring pay interval, log data from the 29-3H well indicates the presence of oil and natural gas across the same potential pay intervals present at West Copperline, which include: the Brushy Canyon, Avalon Shale and 1st and 2nd Bone Spring Sand intervals. This is favorable for future development across the property. Management believes the deeper Wolfcamp formation on the property is also prospective for oil and natural gas.
Lennox Property, Lea County, New Mexico: The Lennox 32 State Unit #4H horizontal Bone Spring well (the "32-4H well") is currently drilling ahead at approximately 15,289 feet measured depth to an intended total measured depth ("TMD") of approximately 15,740 feet. The Company anticipates reaching TMD today and has scheduled the fracture stimulation for October 6, 2014. Caza currently has a 50.00% working interest (approximate 38.98% net revenue interest) in the 32-4H well and the Lennox Property.
Marathon Road/Lynch Property, Lea County, New Mexico: The operator has moved the rig onto the location and is preparing to commence drilling operations on the Marathon Road 15 OB Fed #1H horizontal Bone Spring well. This well is a direct offset to the very successful Marathon Road 15 PA Fed #1H horizontal Bone Spring well, which had an initial 30 day average of 1,974 Boe/d gross, consisting of 1,721 bbls of oil and 1.52 MMcf of natural gas. Caza currently has a 14.7% working interest (approximate 12.5% net revenue interest) in these wells and the Marathon Road Property.
W. Michael Ford, Chief Executive Officer commented:
"This is an exceptional result at Broadcaster, and we are pleased to report the news to our shareholders. As stated previously, frac technologies continue to improve in the Bone Spring Play without a material increase in cost. When using these technologies to tailor fracs for specific reservoir characteristics, as in this case, the results can be impressive.
We are on schedule and close to reaching total measured depth on the Lennox well and look forward to reporting the results of the scheduled frac in October.
The Company's next operated well is currently the Gramma Ridge 27 State #4H horizontal Bone Spring development well, which should commence in October. We are also pleased to see operations have commenced on the second Marathon Road well and anticipate operations to commence on the next Broadcaster well in late Q4 2014."