29th Jan 2015 09:55
LONDON (Alliance News) - Caza Oil and Gas Inc shares dropped on Thursday after it said it has placed its Bone Spring development programme on hold whilst the last well is being drilled on the site as it believes any further work will result in lost income due to the current low oil price.
Caza shares dropped 12% to 4.62 pence per share on Thursday morning.
The Bone Spring development programme in New Mexico, US, is now "held-by-production," and there are no further drilling obligations to be completed on the area, with one well currently being drilled. Caza said there is "significant development upside" on the property.
"Although management expects these properties to be economic even in the current oil price environment, with no further drilling obligations the company will postpone developing them further until oil prices recover and/or operational costs come down enough to justify drilling," said Caza.
On January 10, the company began drilling the last horizontal Bone Spring development well on the Marathon Road property, following on from successful drilling at another development well nearby, which produced 1,160 barrels of oil equivalent per day under a 30 day test period.
"These are prolific wells that would be better developed once the oil price recovers in order to maximize profits for the Company and its shareholders," it added.
By Joshua Warner; [email protected]; @JoshAlliance
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