Q2 results look great! up we go!! -CAZA OIL & GAS ANNOUNCES SECOND QUARTER RESULTS
AND PROVIDES OPERATIONAL UPDATE
HOUSTON, TEXAS (Marketwire - August 14, 2014) - Caza Oil & Gas, Inc. ("Caza" or the "Company") (TSX:CAZ) (AIM:CAZA)is pleased to provide its unaudited financial and operational results for the three-months ended June 30, 2014.
Unaudited Second Quarter Financial Results
· Caza's revenues from oil and natural gas sales increased 489% to US$6,286,049 for the three-month period ended June 30, 2014, from US$1,067,991 for the comparative period in 2013. This also represents a quarter-on-quarter increase of 37% compared to US$4,591,507 in Q1 2014.
· Adjusted EBITDA increased to US$3,269,495 for the three-month period ended June 30, 2014, as compared to an adjusted EBITDA loss of (US$824,891) for the comparative period in 2013. This also represents a quarter-on-quarter increase of 65% compared to US$2,139,210 in Q1 2014.
· Caza's oil and natural gas liquids (NGL) production increased 495% to 65,823 bbls for the three-month period ended June 30, 2014, from 11,059 bbls for the comparative period in 2013. This was also an increase of 47% from 44,724 bbls in Q1 2014.
· The Company's oil and NGL production has increased to 78% of the Company's combined oil and natural gas production in Q2 2014 from 54% in Q2 2013.
· Caza's natural gas production increased 100% to 111,016 Mcf for the three-month period ended June 30, 2014, from 55,626 Mcf for the comparative period in 2013.
· Average net production volumes increased 320% to 937 Boe/d for the three-month period ended June 30, 2014, from 223 Boe/d for the comparative period in 2013, and have since increased to an average of 1,315 Boe/d during the month of July 2014. The Company's net aggregate production for the month of July was 40,776 Boe, which is currently ahead of the Company's forecast.
· Operating net back increased to US$57.84 for the three month period ended June 30, 2014, from US$22.24 for the comparative period in 2013.
· The average oil price received by Caza increased 8% to US$92.89 per bbl during the three-month period ended June 30, 2014, from US$85.92 per bbl during the comparative period in 2013. The average natural gas price received by Caza increased 20% to US$4.47 per Mcf during the three-month period ended June 30, 2014, from US$3.72 per Mcf during the comparative period in 2013.
· The average combined price received by Caza in Q2 2014 increased 1% to US$74.55 per Boe compared to US$74.45 per Boe in Q1 2014.
· Caza had a cash and cash equivalents balance of US$3,944,944 as of June 30, 2014, as compared to US$5,082,401 at March 31, 2014. The Company has drawn an aggregate of US$45MM from the total amount of US$50MM available to it pursuant to its Note Purchase Agreement with Apollo Investment Corporation, an investment fund managed by Apollo Investment Management. These figures do not include gross proceeds from the recent equity raise of approximately US$10 million, as mentioned below.
Second Quarter Operational Results and Recent Events
· West Copperline Property, Lea County, New Mexico: On July 21, 2014, the Company announced results for its West Copperline 29 Fed #4H horizontal Bone Spring development well. Under controlled flowbackthe well produced at a peak 24 hour gross rate of 1,598 Boe, which consisted of 1,220 bbls of oil and 2.27 MMcf of natural gas on July 16, 2014. The initial 28 day average for this well was 1,173 Boe/d gross, which consisted of 922 bbls of oil and 1.5 MMcf of natural gas per day.
Caza now has four producing wells on this property. The West Copperline 29 Fed #1H and #2H wells are producing from the 2nd Bone Spring Sand, and the West Copperline 29 Fed #3H and #4H wells are producing from the 3rd Bone Spring Sand. The West Copperline battery has averaged 1,532 Boe/d gross from all four wells, which consists of 1,238 bbls of oil and 1.8 MMcf of natural gas per day during the month of August 2014. Caza currently has a 62.5% working interest (approximate 47.25% net revenue interest) in the West Copperline wells.
· Gramma Ridge Property, Lea County, New Mexico: On July 21, 2014, the Company announced that the Gramma Ridge 27 State #2H horizontal Bone Spring test well (the "27-2H well") had reached the intended total measured depth and would be fracture stimulated beginning on July 27, 2014. The fracture stimulation was completed this week and included 24 stages. Production tubing is currently being installed, and initial flowback is anticipated to begin later this week. The market will be updated once production has stabilized and a peak rate has been achieved. The 27-2H well is a direct offset to the highly successful Gramma Ridge 27 State #1H well (the "27-1H well"), as referenced below. Caza currently has a 52.5% working interest (approximate 40.82% net revenue interest) in the Gramma Ridge 27-1H and 27-2H wells.
· Broadcaster Property, Lea County, New Mexico (West Copperline non-operated): On July 21, 2014, the Company announced that the the non-operated Broadcaster 29 Fed #3H horizontal 3rd Bone Spring development well was drilling ahead. The operator was preparing to begin drilling the lateral section to a total measured depth of approximately 15,824 feet. The well has reached the intended total measured depth and the fracture stimulation has been scheduled for August 24, 2014. The market will be updated once the frac has been completed and production has stabilized. The Broadcaster property is contiguous to the Company's West Copperline property, and this well is a direct offset to the Company's operated West Copperline Fed 29 #1H and #3H wells, which have eachdelivered very strong results. Caza currently has a 25% working interest (17.63% net revenue interest) in the Broadcaster Fed 29 #3H well.
· On July 21, 2014, the Company announced that it had voluntarily prepaid all amounts owing under its $4.3 million convertible unsecured loan (the "Loan") made available by YA Global Master SPV Ltd., an investment fund managed by Yorkville Advisors LLC ("Yorkville"). The prepayment amount of $1,676,777 terminated the Loan between the Company and Yorkville.
· On July 4, 2014, the Company completed the placing of 32,679,739 common shares at a price of £0.18 per share (approximately C$0.33) for gross proceeds of approximately US$10 million (approximately £5.9 million and C$10.7 million) from investors in the United Kingdom.
· Jazzmaster Property, Lea County, New Mexico: On June 26 2014, the Company announced results for the non-operated Jazzmaster 17 State #3H horizontal Bone Spring development well. Under controlled flowback, the well produced at a peak 24 hour rate of 650 Boe, which consisted of 569 bbls of oil and 488 Mcf of natural gas. The initial 30 day average for this well was 538 Boe/d gross, which consisted of 459 bbls of oil and 471 Mcf of natural gas per day. Caza has a 25.0% working interest (approximately 19.94% net revenue interest) in the Jazzmaster 17 State #3H well.
· On June 5, 2014, the Company announced that it had drawn an advance of US$10MM pursuant to its Note Purchase Agreement with Apollo Investment Corporation, an investment fund managed by Apollo Investment Management. With this advance, the Company has drawn an aggregate of US$45MM from the total facility of US$50MM.
· Gramma Ridge Property, Lea County, New Mexico: On May 29, 2014, the Company announced the results of its Gramma Ridge 27-1H horizontal Bone Spring test well. Under controlled flowback the well produced at a peak 24 hour gross rate of 1,602 Boe, which consisted of 830 bbls of oil and 4.63 MMcf of natural gas.The initial 30 day average for this well was 877 Boe/d gross, which consisted of 530 bbls of oil and 2.1 MMcf of natural gas. Caza currently has a 52.5% working interest (approximate 40.82% net revenue interest) in the Gramma Ridge 27-1H well.
· Forehand Ranch Property, Eddy County, New Mexico: On May 29, 2014, the Company announced that it had begun a shallow pool Cherry Canyon development program on this property. The Cherry Canyon is a shallow oil interval in the Delaware Formation at approximately 4,000 feet vertical depth. The Company's intent was to initially drill and frac three vertical wells, one being a pressure maintenance well, in succession using the same rig. However, log data obtained while drilling made an unpermitted location look more favorable than one of the three permitted locations. Therefore, the Company decided to drill the first two locations and release the rig while it pursued a permit to drill the more favorable location. The two vertical wells, Forehand Ranch 22 State #1 (the FR 22-1 well") and Forehand Ranch 27 State #4 (the "FR 27-4 well"), have been drilled and are scheduled to be fracture stimulated this month. The FR 27-4 well will be completed as a pressure maintenance well, which will significantly reduce lease operating expenses at Forehand Ranch.
The Company has four additional Cherry Canyon locations permitted for drilling on the property, and currently has a 63% working interest (approximate 47.25% net revenue interest) in the FR 22-1, FR 27-4 and the four permitted Cherry Canyon locations.
· West Copperline Property, Lea County, New Mexico: On April 17, 2014, the Company announced the results of its West Copperline 29 Fed #2H well. Under controlled flowback, the wellproduced at a peak 24 hour gross rate of 1,366 Boe, which consisted of 1,177 bbls of oil and 1.133 MMcf of natural gas, on April 12, 2014. The initial 30 day average for this well was 688 Boe/d gross, which consisted of 534 bbls of oil and 925 Mcf of natural gas per day. Caza currently has a 62.5% working interest (approximate 47.25% net revenue interest) in this well.
· Marathon Road/Lynch Property, Lea County, New Mexico: On March 26, 2014, the Company announced the results of the non-operated Marathon Road 15 PA Fed #1H well. Under controlled flowback, the well produced at a rate of approximately 2,361 Boe, which consisted of 2,032 bbls of oil and 1.974 MMcf of natural gas on March 21, 2014. The initial 30 day average for this well was 1,974 Boe/d gross, which consisted of 1,721 bbls of oil and 1.52 MMcf of natural gas. Caza currently has a 14.7% working interest (approximate 12.5% net revenue interest) in this well.
Forward Drilling Program and Performance Against Stated Production Targets
· The next scheduled wells to be drilled under the Company's Bone Spring program are anticipated to be as follows: (i) Operated Lennox 32 State Unit #4H (mid-August 2014); (ii) Non-operated Marathon Road 15 OB #1H (late August 2014); (iii) Operated Gramma Ridge 27 State #4H (early October 2014); and (iv) Non-operated second Broadcaster well (late Q4 2014).
· On February 5, 2014, the Company announced its intended drill plan, including many of the wells listed above, and the resulting production forecast. Production growth was forecasted to continue through August 2014, and was forecasted to reach 35,538 Boe for that month (1,185 Boe/d). The most recent production data for the month of July 2014, revealed the Company's net aggregate production to be 40,776 Boe (1,315 Boe/d), which is currently ahead of the forecasted rates.
W. Michael Ford, Chief Executive Officer commented:
"We are pleased to provide our financial and operational results for the second quarter of 2014. Our numbers are up across the board, both year-on year and quarter-on-quarter. Our oil and NGL volumes are up 495% year-on-year and 47% since Q1 2014. Oil and NGL's now comprise 78% of the Company's combined oil and natural gas production. Additionally, our natural gas production was up 100% year-on-year. These increases have led to a 320% year-on-year increase to the Company's average net production volumes.
Our production increases have led to significant increases in Company revenues and adjusted EBITDA. Company revenues from oil and natural gas sales increased 489% year-on-year and 37% quarter-on-quarter. Our adjusted EBITDA also increased to US$3,269,495 for the quarter compared to a loss a year ago and has increased 65% quarter-on-quarter. These increases along with the recently announced equity raise have allowed us to target additional leasing in the Bone Spring play and retire the Yorkville debt.
The Company's continued successes in the Bone Spring play and the recent equity infusion have the Company poised for further growth in the second half of 2014, which should continue to generate material value for the Company and our shareholders."
Copies of the Company's unaudited financial statements for the first quarter ended June 30, 2014, and the accompanying management's discussion and analysis are available on SEDAR at www.sedar.com and the Company's website at www.cazapetro.com.
About Caza
Caza is engaged in the acquisition, exploration, development and production of hydrocarbons in the following regions of the United States of America through its subsidiary, Caza Petroleum, Inc.: Permian Basin (West Texas and Southeast New Mexico) and Texas and Louisiana Gulf Coast (on-shore).
For further information, please contact:
Caza Oil & Gas, Inc.
Michael Ford, CEO +1 432 682 7424
John McGoldrick, Chairman +65 9731 7471 (Singapore)
Cenkos Securities plc
Beth McKiernan +44 131 220 9778 (Edinburgh)
Neil McDonald +44 131 220 6939 (Edinburgh)
Vigo Communications
Chris McMahon +44 20 7016 9570
Patrick d'Ancona