13 Aug 2010 07:00
August 13, 2010
CAZA OIL & GAS, INC.
BONGO PROSPECT/O.B. RANCH #1 WELL UPDATE
HYDROCARBON DISCOVERY (COOK MOUNTAIN SANDS)
HOUSTON, TEXAS Caza Oil & Gas, Inc. ("Caza" or the "Company") (TSX: CAZ) (AIM: CAZA) is pleased to provide an update on the O.B. Ranch #1 well (the "Well") on the Bongo prospect in Wharton County, Texas.
The Well reached total depth of 16,280 feet on August 10, 2010 having encountered Yegua, Cook Mountain and Wilcox sands. As announced on July 27, 2010, preliminary drilling and log data indicated hydrocarbon-bearing sands in a shallower horizon of the Well.
Logging results and shows while drilling clearly indicate that hydrocarbon-bearing sands were encountered in the Eocene, Cook Mountain sand formation between 12,400-12,900 feet and represent a potentially significant discovery of natural gas and natural gas condensate. High resolution electric log analysis indicates the Well encountered in excess of 100 feet of net potential pay. The analysis indicates that the Cook Mountain sandstone interval should be productive in the Well. Importantly, Caza's seismic data indicates several development locations that could increase reserves and revenues at moderate costs and manageable risk levels.
Additionally, log and seismic data indicate the Well penetrated the margins of a Yegua anomaly at approximately 10,200 feet that may hold additional high-value potential.
The Well also encountered multiple Wilcox sands between 13,930-16,280 feet. Well log analysis confirms the sand to be gas bearing but also indicates extremely low permeability throughout the penetrated Wilcox section. Caza has analyzed all data collected from the Well and has determined that the Wilcox section is unlikely to be productive at commercial rates.
The Company has sought and received approval from its partners in the Well to move up the wellbore and perform production tests starting at a depth of approximately 12,500 feet in the Cook Mountain section. Completion of the Well will involve perforating the wellbore across multiple intervals in the Cook Mountain and flow-testing the Well. Caza expects to optimize production rates by employing fracture stimulation across the full pay section. Due to current market conditions, lead times for fracturing equipment may be as long as 60 days. A further announcement will be made following the fracture procedure.
Caza has a 40% working interest before completion and a 42.24% working interest after completion (approximate net revenue interest 30%) in the Well.
Mike Ford, Chief Executive Officer of the Company, commented:
"We are delighted to have made what appears to be a significant discovery in the Cook Mountain formation, which was penetrated on the flank of a seismically defined trap that covers approximately 600 acres. The net pay calculated from high resolution log analysis indicates the presence of substantial volumes of hydrocarbons. In addition we have the upside potential of the Yegua formation and are examining its potential."
For further information please contact:
| Michael Ford, CEO, Caza Oil & Gas, Inc. John McGoldrick, Chairman Tim Feather/Richard Baty, Westhouse Securities Limited | +1 432 682 7424 +18325731914/+447796861892 +44 (0)20 7601 6100 |
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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.
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.
ADVISORY REGARDING FORWARD LOOKING STATEMENTS
Information in this news release that is not current or historical factual information may constitute forward-looking statements within the meaning of securities laws. Such information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "significant", "high-value" and similar expressions. Information regarding future operations and results relating to the Bongo prospect,the Well, the Wilcox/Cook Mountain/Yegua formations, reserves and revenue increases and the costs and risks associated therewith, and other information relating to future exploration and drilling activities or operations contained in this news release constitutes forward-looking information within the meaning of securities laws.
Implicit in this information are assumptions regarding: the technical and commercial viability of the Well, the results of future geophysical analysis, the timing and results of drilling and completion operations, including partner elections in connection therewith, projected revenue and expenses and well performance. Specifically, the Company has assumed that these prospects, wells and/or activities will produce positive results. These assumptions, although considered reasonable by the Company, 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 mechanical, economic, market and business risks and conditions and could differ materially from what is currently expected as set out above. Furthermore, the completion technique has not yet been performed, and the Well and any future production of hydrocarbons may prove to be technically or economically unviable.
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 required by applicable securities laws.