26th Feb 2015 10:16
LONDON (Alliance News) - Caza Oil & Gas Inc shares were trading lower on Thursday morning after the company said its farm-out and exploration deal with Clayton Williams Energy Inc has been terminated by mutual agreement.
The pair had agreed a deal to jointly develop Clayton Williams-owned land in Texas, but Caza has decided not to proceed with its commitment as it believes it will not provide an appropriate return for its shareholders at present.
"We are disappointed that Caza is no longer participating in developing this substantial acreage in Reeves County, Texas. The original agreement with Clayton Williams represented an opportunistic and innovative transaction and one which was potentially transformational for the company, tripling its current net leasehold position," said Caza Chief Executive W Michael Ford.
"However, the original deal terms are no longer commercially viable in the current oil price environment and, whilst we sought to reach agreement on revised terms to reflect prevailing economics, this was unfortunately not possible and the decision was taken to terminate the agreement rather than incur further costs and commitments," Ford added.
Caza shares were down 8.3% to 5.39 pence on Thursday, one of the worst performers in the AIM All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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