9th Oct 2014 09:04
LONDON (Alliance News) - Caza Oil & Gas Inc Thursday said it has acquired additional acreage in the heart of the Bone Spring play, close to its Marathon Road property in Lea County, New Mexico.
The oil and gas exploration and production company said it has signed a deal with a "large independent company" to acquire a lease comprising 480 gross acres, referred to as East Marathon Road, in the heart of the Bone Spring play, close to Marathon Road, which home to already producing wells.
The initial well, known as 19-2H well is planned as a horizontal 3rd Bone Spring test well.
Under the terms of the deal, Caza will pay 100% of the costs attributable to the other company's 60% working interest in the property for drilling, completing and equipping the well through production facilities to earn a 30% working in interest in the 19-2H well and the East Marathon Road Property
It said that all costs and expenses thereafter will be borne on a 'heads-up basis' - 30% by Caza and 30% by the other company, while the remaining 40% interest in the lease and property is owned by participating third parties.
Caza said it will maintain operations on all subsequent wells drilled on the property.
"We are also happy to report that the actual peak rate on the Broadcaster well was higher than the rate previously announced, and we are equally pleased with the excellent performance of the well through the first month of production. We anticipate drilling of the second Broadcaster well to commence late in the fourth quarter of 2014," said Chief Executive Officer William Ford in the company's statement.
It said the well is currently producing a 25 day average gross rate of 1,696 barrels of oil equivalent, which is comprised of 1,364 barrels of oil and 1.99 million cubic feet of natural gas.
Caza Oil & Gas shares were down 1.6% at 18.70 pence Thursday morning.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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