Caza Oil & Gas Inc. (LSE, TSE: CAZ) announced Dec. 18 two more strong results for the Houston company's Bone Spring program in New Mexico's Permian Basin.
Marathon Road Property, Lea County, N.M.
The Marathon Road 15 OB Fed #1H horizontal Bone Spring development well (15OB-1H) reached the intended total measured depth of about 15,625 feet in the Third Bone Spring Sand interval and was subsequently fracture stimulated in multiple stages beginning on Dec. 9. Under controlled flowback, the producing rates have steadily increased and the 15OB-1H produced at a 24 hour gross rate of about 1,928 barrels of oil equivalent (boe), which is comprised of 1,698 barrels (bbl) of oil and 1.38 million cubic feet (Mcf) of gas, on Dec. 16. The 15OB-1H was producing on a 48/64ths adjustable choke at 820 pounds per square inch (psi) flowing casing pressure.
In addition to production from the 15OB-1H and the previously drilled Marathon Road 15 PA Fed #1H (15PA-1H), both producing from the Third Bone Spring Sand interval, log data was obtained in both wells across the Brushy Canyon, Avalon and First and Second Bone Spring Sand intervals. The data indicates the presence of oil and natural gas across each of these intervals, which is favorable for future development across the unit.
The next horizontal Third Bone Spring well to be drilled on the property, the Marathon Road 15 NC Fed #1, is scheduled to commence drilling operations early in the first quarter of 2015, and is a direct offset to the 15OB-1H well.
Caza currently has a 14.7% working interest (about 12.5% net revenue interest) in the 15OB-1H and 15PA-1H wells.
East Marathon Road Property, Lea County, N.M.
The Igloo 19 State #2H (19-2H well) reached the intended total measured depth of about 16,000 feet in the Third Bone Spring Sand interval and was subsequently fracture stimulated in multiple stages beginning on Dec. 6. Under controlled flowback, the producing rates have steadily increased and the 19-2H produced at a 24 hour gross rate of about 1,356 boe, which is comprised of 1,177 bbl of oil and 1.072 Mcf of gas, on Dec. 16. The 19-2H was producing on a 32/64ths adjustable choke at 775 psi flowing casing pressure.
This is a strong well and a significant discovery for the company, because it is the initial test well drilled on the property and earns Caza its full rights in the lease under the terms of the exploration and development agreement announced on Oct. 9.
Data obtained from the 19-2H well has enhanced the company's geological understanding of the property and will help to refine its approach to well planning and completions on the balance of the lease. In addition to production from the Third Bone Spring Sand interval, log data was obtained across the Brushy Canyon, Avalon and First and Second Bone Spring Sand intervals. The data indicates the presence of oil and gas across each of these intervals, which is favorable for future development across the 480-acre lease.
Caza has earned a 30% working interest (about 24% net revenue interest) in the 19-2H well and the East Marathon Road Property.
Lennox Property, Lea County, N.M.
The casing repair job on the Lennox 32 State Unit #4H horizontal Bone Spring well (32-4H well) is currently being performed, and fracture stimulation is now expected to be rescheduled during the first quarter of 2015.
Caza currently has a 50.00% working interest (about 38.98% net revenue interest) in the 32-4H well and the Lennox Property.
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