Caza Oil & Gas, Inc.
TSX : CAZ
AIM : CAZA

Caza Oil & Gas, Inc.

January 22, 2008 02:30 ET

Caza Provides Operational Update

HOUSTON, TEXAS--(Marketwire - Jan. 22, 2008) - Caza Oil & Gas, Inc. ("Caza" or the "Company") (TSX:CAZ) (AIM:CAZA) is pleased to provide an operational update on the Company's activities in Southwest Louisiana, South Texas and New Mexico.

Production Increase in the Matthys-McMillan #1 Well - The Matthys-McMillan #1 well forms part of the "Hite Offset Property" and is located in the Wharton West Wilcox Field, Wharton County, Texas. Following perforation of an additional zone, the well is currently flowing at a flow rate of 4.6 million standard cubic feet per day of gas, an increase of approximately 53% over the initial flow rate. The Company is currently assessing this well for fracture stimulation in the near future. Caza is the operator of, and has a 19.6% working interest (14.4% net revenue interest) in, this well.

Alligator Property - Located in Calcasieu Parish, Louisiana, the Bell Minerals #1 Well reached its target depth of 9,400 feet in the Hackberry Section on 16 January 2008. The well was then logged but did not encounter hydrocarbons. Information from the well will be used to further evaluate the potential of the area. Caza has a 70.0% working interest (49.0% net revenue interest) in this well.

Wilcox 116 Property - Located in Wharton County, Texas, the Jonell Cerny gas unit #1 well commenced drilling on 15 January 2008. Anticipated to take 60 days to drill, this well is targeting gas in the Deep Wilcox Sands at a total depth of 16,500 feet. The targeted sands are currently producing in the nearby Matthys-McMillan well. The test well, if successful, will establish numerous development locations. Caza is the operator of this well and following completion of the well will have a 47.8% working interest (35.8% net revenue interest) in this well.

Lynch Property - Located in Lea County, New Mexico, the Mud Slide Slim "15" Federal Com. #1 commenced drilling on 12 January 2008. Anticipated to take 30 days to drill, this well is targeting gas in the middle Morrow formation at a depth of 13,200 feet. The middle Morrow formation produces from wells directly offsetting the Caza acreage. Caza has a 40.0% working interest (31.3% net revenue interest) in this well.

Northwest Raptor Property - Located in Lea County, New Mexico. After further evaluation, Caza has elected not to participate in the drilling of this property and therefore has no remaining interest.

In two separate commercial transactions, Caza has purchased participation rights from Austex Enterprises and Midland Oil & Gas, Inc. equal to 25% of Caza's potential working interest in all projects located under certain Transition Zone seismic data volumes covering approximately 2,300 square miles located in South Louisiana and the Texas Gulf Coast Regions. As a result of the transactions, Caza has increased its potential working interest and would have the controlling interest in projects derived from these data volumes.

Mike Ford, Chief Executive Officer of the Company, commented:

"Our first month of life as a public company has been very busy with Caza drilling three operated wells. While we are naturally disappointed with the results of the initial well in our Alligator Property, we are currently evaluating what this outcome means to the Alligator Property as a whole. We are very pleased with the production increase at Matthys-McMillan and its implications for future drilling in that area. The two exploration wells that are currently being drilled, the Jonell Cerny gas unit #1 (Wilcox 116 Prospect) and the Mud Slide Slim "15" Federal Com. #1 (Lynch Prospect), are expected to reach total depth in 60 and 30 days, respectively.

"In line with our strategy, during 2008 we do not intend to drill any further wells on the Alligator Property but intend to mainly focus our efforts on the Wharton West Wilcox area."

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..

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 - 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 investment in 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.

Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, 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's 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, 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.

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 law 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.

The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.

Contact Information

  • Caza Oil & Gas, Inc.
    John McGoldrick
    Executive Chairman
    (281) 363-4442
    Website: www.cazapetro.com
    or
    Noble & Company Limited
    Nick Naylor / Jamie Boyd
    Nominated Adviser and Joint Broker
    +44 (0) 20 7763 2200
    or
    Aquila Financial Ltd
    Peter Reilly
    Financial Public Relations Advisers
    +44 (0) 20 7202 2601