2 Jun 2010 07:00
June 2, 2010
Caza Oil & Gas, Inc. ("Caza" or the "Company")
Farmout of Bongo Prospect and Sale of Glass Ranch Properties
Houston, Texas (June 1, 2010) - Caza (CAZA AIM SYMBOL/CAZ TORONTO SYMBOL) is pleased to announce that it has successfully farmed out part of its 65% working interest in the Bongo Prospect to two partners, Australian-based investment company Verus Investments Limited ("Verus") and Singular Oil & Gas, Inc. ("Singular"). Following the farmout Caza will maintain a 40% working interest in Bongo.
As previously announced Caza has entered into a contract with Patterson Drilling to drill the Bongo Prospect. The contract provides for a test well to be drilled to a total depth of 16,000 feet.
The transaction with Singular constitutes a related party transaction in accordance with Section 501 (c) of the Toronto Stock Exchange ("TSX") Rules and Rule 13 of the AIM Rules for Companies. The directors of Caza, having given notice to the TSX and having consulted with the Company's AIM Nominated Adviser, Westhouse Securities Limited, consider that the terms of the transaction are fair and reasonable insofar as the shareholders are concerned. The TSX has conditionally approved the farmout arrangement with Singular.
In addition to the farmout, the Company is pleased to announce the divestiture of its non-operated Glass Ranch property to Viejo Energy I, LLC doing business as Momentum Energy Corporation ("Momentum") for a cash consideration of $1.4 million. The Glass Ranch property comprises four producing oil wells with Momentum as operator. Caza and Momentum each had a 50% working interest in the wells. The four wells have been on production since 2008, with the last well being completed in November of 2008. The wells have slowly continued to decline, and the combined net revenue from the wells for Q1 2010 was approximately $147,000.
W. Michael Ford, Chief Executive Officer commented:
"We are pleased to announce the completion of the farmout of Bongo to Verus and Singular. Caza is now in a position to drill this potential high-impact prospect, and we expect drilling to commence within 14 days.
"Additionally, the consideration received from the sale of Glass Ranch demonstrates the inherent value within the Caza portfolio with funds realized going towards our high-impact exploration activities."
About Caza
Caza is engaged in the acquisition, exploration, development and production of hydrocarbons in the Texas Gulf Coast (on-shore), south Louisiana, southeast New Mexico and the Permian Basin of West Texas regions of the United States of America through its subsidiary, Caza Petroleum, Inc.
For further information please contact:
| John McGoldrick, Caza Oil & Gas, Inc | +1 281 363 4442 |
| Michael Ford, CEO, Caza Oil & Gas, Inc. Tim Feather/Richard Baty, Westhouse Securities Limited | +1 432 682 7424 +44 (0)20 7601 6100 |
www.cazapetro.com
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.
In accordance with AIM Rules - Guidance Note for Mining, Oil and Gas Companies, the information contained in this announcement has been reviewed and approved by Anthony B. Sam, Vice President Operations of Caza who is a Petroleum Engineer and a member of The Society of Petroleum Engineers.
ADVISORY REGARDING FORWARD LOOKING STATEMENTS
Information in this news release that is not current or historically factual information may constitute forward-looking information within the meaning of securities laws. Such information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "schedule", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "high-impact", "exploration activities" and similar expressions. Information regarding the operations to be conducted on the Bongo Prospect contained in this news release constitutes forward-looking information within the meaning of securities laws.
Implicit in this information are assumptions regarding: the timing of drilling operations, the performance of Verus and Singular's obligations under the Farmout Agreements and their elections in connection therewith, projected revenue and expenses and well performance. Specifically, the Company has assumed that these agreements, prospects and/or activities will produce positive drilling results. These assumptions, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual future operating results and economic performance of the Company are subject to a number of risks and uncertainties, including general economic, market and business conditions and could differ materially from what is currently expected as set out above.
For more exhaustive information on these risks and uncertainties you should refer to the Company's most recently filed annual information form which is available at www.sedar.com. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time except as may be required by securities laws.