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3 Jul 2008 07:00
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JulyΒ 3,Β 2008
Caza Oil & Gas, Inc. ("Caza" or theΒ "Company")
LynchΒ PropertyΒ -Β Production Start Up
Southeast New MexicoΒ -Β Execution of Exploration Agreement
Houston, TexasΒ (JulyΒ 3, 2008)Β -Β Caza (CAZAΒ AIM SYMBOL/CAZΒ TORONTO SYMBOL) is pleased toΒ announce that it hasΒ completed theΒ exploratoryΒ well on itsΒ LynchΒ PropertyΒ located in Lea County, NewΒ Mexico, and sales gas fromΒ theΒ well isΒ nowΒ being delivered intoΒ aΒ local gas gatheringΒ facility.
Caza is alsoΒ pleased to announce that it has formed aΒ strategicΒ alliance withΒ Wise Oil &Β GasΒ that will allow it to accelerate its leasing efforts in southeastΒ New Mexico.
Lynch PropertyΒ -Β Located inΒ Lea County, New Mexico, theΒ MudΒ Slide Slim 15 Federal #1Β (the "MudΒ SlideΒ well"),Β as previously announced,Β reached a total depth ofΒ 13,513Β feetΒ andΒ wasΒ fracture stimulatedΒ in the MorrowΒ formation.Β Β TheΒ MudΒ SlideΒ wellΒ isΒ currently producingΒ at a grossΒ salesΒ rate ofΒ 823Β thousand cubic feet of gas per dayΒ and 5 barrels of oil per day.
Caza is the operator of this well and hasΒ aΒ 40%Β working interestΒ and a correspondingΒ 31.3%Β net revenue interestΒ before payout, which reduces to a 27.8% working interest and a corresponding 20.9% net revenue interest after payout.
Exploration Agreement,Β Southeast New MexicoΒ - Caza has executed an Exploration Agreement ("EA") with Wise Oil & Gas No. 8, Ltd. ("Wise"), naming Caza as Operator,Β under which they willΒ jointlyΒ and exclusivelyΒ (subject to certain conditions)Β lease acreageΒ in Lea, EddyΒ and Chaves counties ofΒ southeastΒ New MexicoΒ on a 50/50 basis.Β Β The EA provides that, inter alia, WiseΒ intendsΒ toΒ provide a minimum of $10Β million for leasing over the next 2 years.Β Β Caza will have the option of deferringΒ paymentΒ of itsΒ share of lease costs for up to eighteenΒ months.Β Β IfΒ CazaΒ electsΒ to defer,Β Wise willΒ receive an overriding royalty interestΒ of two (2%) percent, which willΒ increase afterΒ six monthsΒ by one (1%)Β percent perΒ quarter to a maximum of six (6 %) percent.
John McGoldrick,Β ExecutiveΒ ChairmanΒ of the Company,Β commented: "We areΒ veryΒ pleasedΒ to report the start of production from the MudΒ Slide Slim wellΒ as this is theΒ first wellΒ drilled under ourΒ southeastΒ New MexicoΒ explorationΒ program. We are equally pleased to announce our new ventureΒ with Wise Oil & Gas, who are already partnersΒ in our four existingΒ properties inΒ southeastΒ New Mexico. This alliance willΒ give usΒ the flexibilityΒ to quickly expand our leasing effortsΒ in this exciting area."
About Caza
Caza is engaged in the acquisition, exploration, development and production of hydrocarbons inΒ theΒ TexasΒ GulfΒ CoastΒ (on-shore), southΒ Louisiana, southeastΒ New MexicoΒ and theΒ PermianΒ BasinΒ of westΒ TexasΒ regions of theΒ United States of AmericaΒ through its subsidiary, Caza Petroleum,Β Inc.
For further information contact:
John McGoldrick, Executive Chairman, Caza Oil & Gas, Inc. +1 281 363 4442
Nick NaylorΒ / Jamie Boyd, Noble & Company Limited +44 (0) 20 7763 2200
(Nominated Adviser and Joint Broker)
Peter Reilly, Aquila Financial Ltd +44 (0) 118 979 4100
(Financial Public Relations Advisers)
www.cazapetro.com
In accordance with AIM Rules - Guidance Note for Mining, Oil and Gas Companies, the information contained in this announcement has been reviewed and approved byΒ Anthony B.Β Sam,Β Vice President OperationsΒ of CazaΒ who is a Petroleum Engineer and a member of The Society of Petroleum Engineers.
ADVISORY REGARDING FORWARD-LOOKING STATEMENTSΒ - In the interests of providing Caza shareholders and potential investors with information regarding Caza, including management's assessment of Caza's and its subsidiaries' future plans and operations, certain statements contained in this news release are forward-looking statements or information within the meaning of applicable securities legislation, collectively referred to herein as "forward-looking statements." Forward-looking statements in this news release include, but are not limited to: future economic and operating performance (including per share growth, cash flow and increase in net asset value); anticipated growth and success of resource plays and the expected characteristics of resource plays; free cash flow which may be generated in 2008 and beyond, and potential uses for such free cash flow; anticipated production and sales of oil, natural gas and NGLs in 2008; anticipated impact and success of Caza's price hedging strategy, if any; anticipated costs; anticipated prices for oil and natural gas; anticipated capital investmentΒ inΒ 2008 and the allocation thereof; anticipated capital inflation; anticipated capital and operating cost efficiencies; anticipated growth in hydrocarbon production; forecast cash flow for 2008 and the anticipated ability to meet guidance targets.Β
Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans,Β intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause the company's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things: volatility of and assumptions regarding oil and gas prices; assumptions based upon the company's current guidance; fluctuations in currency exchange and interest rates; product supply and demand; market competition; risks inherent in the company'sΒ marketing operations, including credit risks; imprecision of reserve estimates and estimates of recoverable quantities of oil, natural gas and liquids from resource plays and other sources not currently classified as proved; the company's ability to replace and expand oil and gas reserves; the company's ability to generate sufficient cash flow from operations to meet its current and future obligations; the company's ability to access external sources of debt and equity capital; the timing and the costs of well and pipeline construction; the company's ability to secure adequate product transportation; changes in royalty,Β tax, environmental and other laws or regulations or the interpretations of such laws or regulations; the risk of terrorist threats; risks associated with future lawsuits and regulatory actions made against the company; and other risks and uncertainties described from time to time in the reports and filings made with securities regulatory authorities by Caza.Β
Although Caza believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned that the foregoing list of important factors is not exhaustive. Furthermore, the forward-looking statements contained in this news release are made as of the date of this news release, and, except as required by lawΒ or regulation, Caza does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
TheΒ TorontoΒ Stock Exchange has neither approved nor disapproved the information contained herein.
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