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

Caza Oil & Gas, Inc.

August 15, 2011 02:00 ET

Caza Oil & Gas Announces Second Quarter Results and Provides Operational Update

HOUSTON, TEXAS--(Marketwire - Aug. 15, 2011) - Caza Oil & Gas, Inc. ("Caza" or the "Company") (TSX:CAZ)(AIM:CAZA), the U.S. focused exploration, appraisal, development and production company, is pleased to provide its unaudited financial and operational results for the six months ended June 30, 2011.

Second Quarter Financial Highlights


--  Caza's production increased 32% to 18,130 Boe for the three-month period
    ended June 30, 2011, from 13,712 Boe for the comparative period in 2010.
    This represents an average daily production rate increase of 48 Boe/d
    for the three month period ended June 30, 2011, 199 Boe/d as compared to
    151 Boe/d for the comparative period. As anticipated, Q2 2011 production
    was slightly lower than Q1 2011 (which was 23,974 Boe) due to standard
    production curve declines in certain wells. Recently drilled wells that
    are in various stages of completion are expected to more than make up
    for the decline (see "Second Quarter Operational Highlights" below). 

--  Caza had a cash balance of $24,533,451 as of June 30, 2011, as compared
    to $9,375,345 at June 30, 2010 and $33,885,900 at December 31, 2010. The
    increase is attributable to the placing announced on Nov 15 2010. Caza's
    working capital balance at June 30, 2011, was $20,870,708 as compared to
    $26,612,514 at March 31, 2011. The decrease in Caza's working capital
    balance primarily represents the investments made to drill the O.B.
    Ranch #2 development well in Wharton County, Texas, the Caza Elkins 3401
    & 3402 wells in Midland County, Texas, and the Caza 158 #3 in Upton
    County, Texas. 

--  Revenues from oil and gas sales increased 112% to $843,836 for the
    three-month period ended June 30, 2011, up from $398,883 for the
    comparative period in 2010. The increase in revenues was primarily due
    to the additional wells brought on since the comparative period. The
    average combined price received by Caza increased 60% to $46.54 per Boe
    during the three-month period ended June 30, 2011, from $29.09 per Boe
    during the comparative period in 2010. 

--  General and Administrative expenses were $1,435,156 ($1,403,088 net of
    reimbursements) for the three-month period ended June 30, 2011, as
    compared to $1,188,962 ($1,078,739 net of reimbursements) for the
    comparative period in 2010. The change in General and Administrative
    costs are a result of additional costs incurred and changes in reporting
    requirements as a result of converting to the International Financial
    Reporting Standards. During the three month period ended June 30, 2010,
    the Company received reimbursements that resulted from certain joint
    venture agreements that provided reductions in overhead costs that
    expired April 8, 2010. 

Second Quarter Operational Highlights


--  Drilling commenced on the O.B. Ranch #2 development well in Wharton
    County, Texas in May 2011. The well reached its target depth of 13,210
    feet in June 2011, and electric logs were obtained through the target
    depth indicating potential pay in the Frio and targeted Cook Mountain
    formations. The well was fracture stimulated at the end of July 2011,
    and is currently being flowed back in order to clean up the fracture
    fluids. The well has been placed on an extended well test, and the
    market will be updated once stabilized flow rates have been achieved. 

--  The Caza Elkins 3401 well in Midland County, Texas, reached a total
    depth of 11,854 feet in June 2011. The rig was immediately moved to the
    Caza Elkins 3402 location, which reached a total depth of 11,852 feet in
    July 2011. Log data from both wells indicated multiple potential pay
    sands for both oil and gas in the Spraberry, Wolfcamp, Strawn, Atoka and
    Mississippian/Devonian formations. The fracture stimulation program for
    the Caza Elkins 3401 well began on July 28, 2011. The fracture
    stimulation program for the Caza Elkins 3402 well began earlier than
    anticipated on August 12, 2011. Both wells are currently being flowed
    back in order to clean up the fracture fluids. Caza will update the
    market once initial flow rates have been established for each well. 

--  The Caza 158 #3 well on the Windham property reached its target depth of
    9,824 feet in June 2011, and Caza elected to participate in the
    operator's proposal to complete the well. The well has been fracture
    stimulated across all potentially productive intervals seen on the logs,
    which include the Spraberry/Wolfcamp, Penn and Strawn formations. The
    Caza 158 #3 was the fourth well drilled and completed on this property.
    The Caza 158 #1, 158 #2 and 162 #1 wells are currently at various stages
    in their respective fracture stimulation programs, but are all producing
    oil and natural gas. 

W. Michael Ford, Chief Executive Officer commented:

"I am very pleased with the progress that we have made in 2011, both operationally and from a financial perspective. In the three months to June 30, 2011, Caza has continued to progress a busy work program, which should add further production, reserves and cash flow to the solid platform that we have created through our endeavours to date.

"Revenues have materially risen due to increased oil and gas production levels and a supportive price environment. As we add production through our exploration and development campaign, the Company and the shareholders should continue to benefit.

"I look forward to updating the market on future exploration activities and established flow rates associated with wells that are currently in various stages of completion operations."

Copies of the Company's unaudited financial statements for the second quarter ended June 30, 2011, 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 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 STATEMENT

Information in this news release that is not current or historical 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", "intend", "could", "might", "should", "believe", "develop", "test", "anticipation" and similar expressions. In particular, information regarding the depth, timing and location of future drilling, intended production testing and the Company's future working interests and net revenue interests in properties contained in this news release constitutes forward-looking information within the meaning of securities laws.

Implicit in this information, are assumptions regarding the success and timing of drilling operations, rig availability, projected revenue and expenses and well performance. These assumptions, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual future operations, 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. In addition, the geotechnical analysis and engineering to be conducted in respect of the various wells is not complete. Future flow rates from wells may vary, perhaps materially, and wells may prove to be technically or economically unviable. Any future flow rates will be subject to the risks and uncertainties set out herein.

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 and the Company's website at www.cazapetro.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.

Boe may be misleading, particularly if used in isolation. A Boe conversion ratio of 6 Mcf : 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head.


Caza Oil & Gas, Inc.
Condensed Consolidated Statement of Financial Position
(Unaudited)

                                         June 30,  December 31,   January 1,
(In United States dollars)                  2011          2010         2010
---------------------------------------------------------------------------
Assets                                                                     

Current                                                                    
  Cash and cash equivalents        $  24,533,451 $  33,885,900  $ 9,268,547
  Accounts receivable                  3,497,242     2,554,913    3,973,085
  Prepaid and other                      187,138       291,517      278,914
                                   ----------------------------------------
                                      28,217,831    36,732,330   13,520,546

Exploration and evaluation assets                                          
 (Note 3)                              8,982,431     7,371,582   11,662,047
Petroleum and natural gas                                                  
 properties and equipment (Note 4)    31,049,750    29,379,862   24,548,233
                                   ----------------------------------------

                                   $  68,250,012 $  73,483,774 $ 49,730,826
                                   ----------------------------------------
Liabilities                                                                

Current                                                                    
  Accounts payable and accrued                                             
   liabilities                     $   7,347,123 $   7,362,243  $ 5,144,083

Decommissioning liabilities (Note                                          
 5)                                      797,842       807,754      706,541
                                   ----------------------------------------
                                       8,144,965     8,169,997    5,850,624
Shareholders' Equity                                                       
  Share capital (Note 6(b))           75,016,655    75,013,680   50,293,526
  Contributed surplus (Note 6(d))      9,403,947     9,363,598    5,175,086
  Deficit (as restated, Note 11)     (27,222,889)  (22,700,262) (12,506,981)
                                   ----------------------------------------
Equity attributable to owners of                                           
 the Company                          57,197,713    61,677,016   42,961,631

Non-controlling interests (as                                              
 restated, Note 11)                    2,907,334     3,636,761      918,571
                                   ----------------------------------------

Total equity                          60,105,047    65,313,777   43,880,202
                                   ----------------------------------------

                                   $  68,250,012 $  73,483,774 $ 49,730,826
                                   ----------------------------------------

See accompanying notes to the interim condensed consolidated financial     
statements                                                                 

Caza Oil & Gas, Inc.
Condensed Consolidated Statement of Comprehensive Loss
(Unaudited)

                             Three months ended           Six months ended 
                                   June 30,                    June 30,     
(In United States                                                           
 dollars)                    2011          2010          2011          2010
----------------------------------------------------------------------------
Revenue and other                                                           
  Petroleum and                                                             
   natural gas        $   843,836 $     398,883 $   1,887,779 $   1,095,548
  Gain on sale of                                                           
   assets                       -       728,239             -       728,239
  Interest income           4,346           137        13,038           300
                    -------------------------------------------------------

                          848,182     1,127,259     1,900,817     1,824,087
                    -------------------------------------------------------

Expenses                                                                    
  Production              185,439       164,395       351,735       409,100
  General and                                                              
   administrative       1,403,088     1,078,739     2,495,999     1,220,802
  Depletion,                                                               
   depreciation and                                                        
   amortization           580,141       517,450     1,399,254     1,193,428
  Financing costs -                                                        
   unwinding of the                                                        
   discount                 6,597         6,322        13,194        12,643
  Other expense                                                            
   (income)               (42,006)            -       (96,193)            -
  Development and                                                          
   production                                                              
   impairment                   -             -        73,183             -
  Exploration and                                                          
   evaluation                                                              
   impairment             292,074             -     2,915,699     3,698,514
                    -------------------------------------------------------
                        2,425,333     1,766,906     7,152,871     6,534,487
                    -------------------------------------------------------

Net loss               (1,577,151)     (639,647)   (5,252,054)   (4,710,400)
                    -------------------------------------------------------
Attributable to (as                                                         
 restated, Note 11):                                                        
  Owners of the                                                            
   Company             (1,358,110)     (524,270)   (4,522,627)   (3,854,316)
  Non-controlling                                                          
   interests             (219,041)     (115,377)     (729,427)     (856,084)
                     -------------------------------------------------------
                       (1,577,151)     (639,647)   (5,252,054)   (4,710,400)
                     -------------------------------------------------------


Net loss per share                                                          
 - basic and diluted $      (0.01) $      (0.01) $      (0.03) $      (0.04)
                     -------------------------------------------------------

Weighted average                                                            
 shares outstanding                                                         
 - basic and diluted                                                        
  (1)                 164,330,813   119,319,000   164,324,939   119,319,000
                     -------------------------------------------------------

(1) All options and warrants have been excluded from the diluted loss per
 share computation as they are anti-dilutive.                              

See accompanying notes to the interim condensed consolidated financial      
 statements                                                                 

Caza Oil & Gas, Inc.
Condensed Consolidated Statement of Cash Flows
(Unaudited)

                                                          Six months ended 
                                                               June 30,     
(In United States dollars)                                 2011        2010
---------------------------------------------------------------------------
OPERATING                                                                  
  Net loss for the period                            (5,252,054) (4,710,400)

  Adjustments for items not affecting cash:                                
  Depletion, depreciation and amortization            1,399,254   1,193,428
  Unwinding of the discount                              13,194      12,643
  Share-based compensation                               41,574      43,076
  Development and production impairment                  73,183           -
  Properties                                          2,915,699   3,698,514
  Gain on sale of assets                                (54,185)   (728,239)
  Changes in non-cash working capital (Note 8(a))       716,012    (429,816)
                                                    -----------------------
  Cash flows used in operating activities              (147,323)   (920,794)
                                                    -----------------------

FINANCING                                                                  
  Proceeds from issuance of shares                        1,750           -
                                                    -----------------------
  Cash flow from (used in) financing activities           1,750           -
                                                    -----------------------
INVESTING                                                                  
  Exploration and evaluation expenditures            (4,656,268) (2,936,255)
  Development and production expenditures            (2,962,647)   (478,015)
  Purchase of office furniture and equipment            (18,879)    (77,794)
  Proceeds from the sale of oil & gas assets                  -   1,800,000
  Partner reimbursement                                       -     988,850
  Changes in non-cash working capital (Note 8(a))    (1,569,082)  1,730,806
                                                    -----------------------
  Cash flows used in investing activities            (9,206,876)  1,027,592
                                                    -----------------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS     (9,352,449)    106,798

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD       33,885,900   9,268,547
                                                    -----------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD             24,533,451   9,375,345
                                                    -----------------------
Supplementary information (Note 8)

See accompanying notes to the interim condensed consolidated financial 
statements                                

Caza Oil & Gas, Inc.
Condensed Consolidated Statement of Changes in Equity
(Unaudited)

For the six month periods ended June 30,                  2011         2010
---------------------------------------------------------------------------
Share Capital                                                              
  Balance, Beginning of Period                      75,013,680   50,293,526
  Common Shares Issued                                   2,975            -
  Balance, End of Period                            75,016,655   50,293,526
                                                 --------------------------
Contributed Surplus                               
  Balance, Beginning of Period                       9,363,598    5,175,086
  Exercise of stock options                             (1,225)           -
  Share-Based Compensation                              41,574      178,649
                                                 --------------------------
  Balance, End of Period                             9,403,947    5,353,735
                                                 --------------------------
Deficit (as restated, Note 11)                                        
  Balance, Beginning of Period                     (22,700,262) (12,506,981)
  Net Loss                                          (4,522,627)  (3,854,316)
                                                 --------------------------
  Balance, End of Period                           (27,222,889) (16,361,297)
                                                 --------------------------
Non-Controlling Interests (as restated, Note 11)                           
  Balance, Beginning of Period                       3,636,761      918,571
  Net loss allocated to non-controlling interests     (729,427)    (856,084)
                                                 --------------------------
  Balance, End of Period                             2,907,334       62,487
                                                 --------------------------
Total Shareholders' Equity                          60,105,047   39,348,451
                                                 --------------------------

See accompanying notes to the interim condensed consolidated financial     
statements                                                                 

1. Basis of Presentation

Caza Oil & Gas, Inc. ("Caza" or the "Company") was incorporated under the laws of British Columbia on June 9, 2006 for the purposes of acquiring shares of Caza Petroleum, Inc. ("Caza Petroleum"). The Company and its subsidiaries are engaged in the exploration for and the development, production and acquisition of, petroleum and natural gas reserves. The Company's common shares are listed for trading on the TSX and AIM stock exchanges.

In conjunction with the Company's annual audited Consolidated Financial Statements to be issued under International Financial Reporting Standards ("IFRS") for the year ended December 31, 2011, these interim Condensed Consolidated Financial Statements present Caza's financial results of operations and financial position under IFRS as at and for the three and six months ended June 30, 2011, including 2010 comparative periods. As a result, they have been prepared in accordance with IFRS 1, "First-time Adoption of International Reporting Standards" and with International Accounting Standards ("IAS") 34, "Interim Financial Reporting", as issued by the International Accounting Standards Board ("IASB") using the accounting policies the Company expects to adopt in its consolidated financial statements for the year ending December 31, 2011.

These interim Condensed Consolidated Financial Statements do not include all the necessary annual disclosures in accordance with IFRS. Prior to 2011 reporting, the Company prepared its interim and annual consolidated financial statements in accordance with Canadian general accepted accounting principles ("Canadian GAAP").

The preparation of these interim Condensed Consolidated Financial Statements resulted in selected changes to Caza's accounting policies as compared to those disclosed in the Company's annual audited Financial Statements for the period ended December 31, 2010 issued under GAAP. A summary of the significant changes to Caza's accounting policies is disclosed in Note 11 along with reconciliations presenting the impact of the transition to IFRS for the comparative periods as at January 1, 2010, as and for the six months ended June 30, 2010, and as at for the twelve months ended December 31, 2010.

Caza's reporting currency is the United States ("U.S.") dollar as the majority of its transactions are denominated in the currency.

2. Significant Accounting Policies

The accounting policies set out below have been applied consistently to all years presented in these condensed consolidated financial statements, and have been applied consistently by the Company and its subsidiaries.

(a) Basis of consolidation:


--  Subsidiaries: 
    --  Subsidiaries are entities controlled by the Company. Control exists
        when the Company has the power to govern the financial and operating
        policies of an entity so as to obtain benefits from its activities.
        In assessing control, potential voting rights that currently are
        exercisable are taken into account. The financial statements of
        subsidiaries are included in the condensed consolidated financial
        statements from the date that control commences until the date that
        control ceases. 

        Details of the Company's subsidiaries at the end of the reporting
        period are as follows: 

----------------------------------------------------------------------------
                                  Place of          Proportion of ownership 
                                  incorporation   interest and voting power
Name of subsidiary                and operation   power held by the Company
----------------------------------------------------------------------------
                                                      June 30,  December 31,
                                                         2011          2010
----------------------------------------------------------------------------
Caza Petroleum Inc.               Delaware/Texas           86%           82%
Caza Operating, LLC               Texas                   100%          100%
Falcon Bay Operating, LLC         Texas                   100%          100%
Falcon Bay Sutton County, LLC     Texas                   100%          100%

The proportion not owned by the Company is shown as non-controlling interests in these financial statements and relates to exchangeable rights in Caza Petroleum Inc. which are held by management and which are exchangeable into the Company's shares (see Note 6 (e)).

Jointly controlled operations and jointly controlled assets:

Many of the Company's oil and natural gas activities involve jointly controlled assets. The condensed consolidated financial statements include the Company's share of these jointly controlled assets and a proportionate share of the relevant revenue and related costs.

Transactions eliminated on consolidation:

Intercompany balances and transactions, and any unrealized income and expenses arising from intercompany transactions, are eliminated in preparing the condensed consolidated financial statements.

(b) Foreign currency:

The Company, its subsidiary companies each determines their functional currency of the primary economic environment in which they operate. The Company's (and its subsidiaries) functional currency is the U.S. Dollar. Transactions denominated in a currency other than the functional currency of the entity are translated at the exchange rate in effect on the transaction date.

(c) Financial instruments:

Non-derivative financial instruments:

Non-derivative financial instruments comprise accounts receivable, cash and cash equivalents, accounts payable and accrued liabilities. Non-derivative financial instruments are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, non-derivative financial instruments are measured as described below.

Cash and cash equivalents:

Cash and cash equivalents comprise cash on hand, term deposits held with banks, other short-term highly liquid investments (including money market instruments) with original maturities of three months or less.

Financial assets at fair value through profit or loss:

An instrument is classified at fair value through profit or loss if it is held for trading or is designated as such upon initial recognition. Upon initial recognition attributable transaction costs are recognized in profit or loss when incurred. Financial instruments at fair value through profit or loss are measured at fair value, and changes therein are recognized in profit or loss. The Company has designated cash and cash equivalents as fair value through profit and loss.

Other:

Other non-derivative financial instruments, such as accounts receivable and accounts payable and accrued liabilities, are measured at amortized cost using the effective interest method, less any impairment losses.

(d) Evaluation and exploration assets:

Pre-license costs are expensed in the statement of operations as incurred.

Exploration and evaluation ("E&E") costs, including the costs of acquiring licenses and directly attributable general and administrative costs, initially are capitalized as either tangible or intangible exploration and evaluation assets according to the nature of the assets acquired. The costs are accumulated in cost centers by well, field or exploration area pending determination of technical feasibility and commercial viability.

Assets classified as E&E are not amortized, but are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units.

The technical feasibility and commercial viability of extracting a mineral resource is considered to be determinable when proven reserves are determined to exist. A review of each exploration license or field is carried out, at least annually, to ascertain whether proven reserves have been discovered. Upon determination of proven reserves, exploration and evaluation assets attributable to those reserves are first tested for impairment and then reclassified from exploration and evaluation assets to a separate category within tangible assets referred to as petroleum and natural gas interests.

(e) Development and production costs:

Items of property, plant and equipment ("PPE"), which include oil and gas development and production assets, are measured at cost less accumulated depletion and depreciation and accumulated impairment losses. Development and production assets are grouped into cash-generating units ("CGU")'s for impairment testing.

The cost of property, plant and equipment at January 1, 2010, the date of transition to IFRS, was determined by allocating the net costs in the full cost pool to the areas within the CGU's according to the proven and probable reserves of each area. Development costs that may be capitalized as PPE include land acquisition costs, geological and geophysical expenses, the costs of drilling productive wells, the cost of petroleum and natural gas production equipment, directly attributable and incremental general overhead and estimated abandonment costs. When significant parts of an item of property, plant and equipment, including oil and natural gas interests, have different useful lives, they are accounted for as separate items.

Gains and losses on disposal of an item of property, plant and equipment, including oil and natural gas interests, are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognized within "other expenses (income)" in profit or loss. The carrying amount of any replaced or sold component is derecognized.

Maintenance:

The costs of the day-to-day servicing of property, plant and equipment are recognized in profit or loss as incurred.

Depletion and depreciation:

The net carrying value of development or production assets is depleted using the unit of production method by reference to the ratio of production in the year to the related proven reserves, taking into account estimated future development costs necessary to bring those proved reserves into production. Future development costs are estimated taking into account the level of development required to produce the reserves. These estimates are reviewed by independent reserve engineers at least annually.

Other Property and Equipment:

For other assets, depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Land is not depreciated.

The estimated useful lives for other assets for the current and comparative years are as follows:


Office equipment         5 - 7 years    
Fixtures and fittings    5 - 7 years    

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

(f) Impairment:

Financial assets:

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.

An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows.

All impairment losses are recognized in profit or loss. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized. For financial assets measured at amortized cost the reversal is recognized in profit or loss.

Non-financial assets:

The carrying amounts of the Company's non-financial assets, other than "E&E" assets and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. An impairment test is completed each year for other intangible assets that have indefinite lives or that are not yet available for use. E&E assets are also assessed for impairment if facts and circumstances suggest that the carrying amount exceeds the recoverable amount and before they are reclassified to property and equipment, as oil and natural gas interests.

For the purpose of impairment testing, assets are grouped together into CGUs. A CGU is a grouping of assets that generate cash flows independently of other assets held by the Company. The recoverable amount of an asset or a CGU is the greater of its value in use and its fair value less costs to sell.

An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss.

Impairment losses recognized in prior years are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depletion and depreciation or amortization, if no impairment loss had been recognized.

(g) Decommissioning liabilities:

The Company recognizes a decommissioning liability in the period in which it has a present legal or constructive liability and a reasonable estimate of the amount can be made. Liabilities are measured based on current requirements, technology and price levels and the present value is calculated using amounts discounted over the useful economic life of the assets. Amounts are discounted using the risk-free rate. On a periodic basis, management reviews these estimates and changes, if any, will be applied prospectively. The fair value of the estimated decommissioning liability is recorded as a long-term liability, with a corresponding increase in the carrying amount of the related asset. The capitalized amount is depleted on a unit-of-production basis over the life of the proved reserves. The liability amount is increased each reporting period due to the passage of time and the amount of accretion is charged to finance expense in the period. Periodic revisions to the estimated timing of cash flows or to the original estimated undiscounted cost can also result in an increase or decrease to the decommissioning liability. Actual costs incurred upon settlement of the obligation are recorded against the decommissioning liability to the extent of the liability recorded.

(h) Share capital:

Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares and share options are recognized as a deduction from equity, net of any tax effects.

(i) Share based payments:

Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date.

The grant date fair value of options granted to employees is recognized as compensation expense on a graded basis over the vesting period, within general and administrative expenses, with a corresponding increase in contributed surplus. A forfeiture rate is estimated on the grant date; however, at the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized on a prospective basis.

(j) Revenue:

Revenue from the sale of oil and natural gas is recorded when the significant risks and rewards of ownership of the product is transferred to the buyer which is usually when legal title passes to the external party. This is generally at the time product enters the pipeline or any other means of transportation. Revenue is measured net of royalties.

(k) Finance income and expenses:

Finance expense comprises interest expense on borrowings, if any, unwinding of the discount on decommissioning liabilities and impairment losses recognized on financial assets.

Borrowing costs incurred for the construction of qualifying assets are capitalized during the period of time that is required to complete and prepare the assets for their intended use or sale. All other borrowing costs are recognized in profit or loss using the effective interest method. The capitalization rate used to determine the amount of borrowing costs to be capitalized is the weighted average interest rate applicable to the Company's outstanding borrowings during the period.

Interest income is recognized as it accrues in profit or loss, using the effective interest method.

(l) Earnings per share:

Basic earnings per share is calculated by dividing the profit or loss attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common shares outstanding for the effects of dilutive instruments such as options granted to employees. Diluted per share calculations reflect the exercise or conversion of potentially dilutive securities or other contracts to issue shares at the later of the date of grant of such securities or the beginning of the period. The Company computes diluted earnings per share using the treasury stock method to determine the dilutive effect of securities or other contracts. Under this method, the diluted weighted average number of shares is calculated assuming the proceeds that arise from the exercise of outstanding, in-the-money options are used to purchase common shares of the Company at their average market price for the period. No adjustment to diluted earnings per share or diluted shares outstanding is made if the result of the calculations is anti-dilutive.

(m) Application of new and revised International Financial Reporting Standards (IFRSs) issued but not yet effective.

The Company has not applied the following new and revised IFRSs that have been issued but are not yet effective.


IFRS 7 (revised)    "Financial Instruments: Disclosures"                    
IFRS 9 (revised)    "Financial Instruments: Classification and Measurement" 
IAS 12 (revised)    "Income Taxes"                                          
IFRS 10 (new)       "Consolidated Financial Statements"                     
IFRS 11 (new)       "Joint Arrangements"                                    
IFRS 12 (new)       "Disclosure of Interests in Other Entities"             
IAS 27 (revised)    "Separate Financial Statements"                         
IAS 28 (revised)    "Investments in Associates and Joint Ventures"          
IFRS 13 (new)       "Fair Value Measurement"                                
IAS 1 (revised)     "Presentation of Financial Statements"                  

(n) Critical accounting judgments and key sources of estimation uncertainty

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the amounts reported in the interim condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The interim condensed consolidated financial statements have, in management's opinion, been properly prepared using careful judgment with reasonable limits of materiality.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements in applying accounting policies

The following are the critical judgments, apart from those involving estimations (see below), that management has made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognized in the consolidated financial statements include:

a) Estimation of reserves

Estimates of recoverable quantities of proved and probable reserves include judgmental assumptions and require interpretation of complex geological and geophysical models in order to make an assessment of the size, shape, depth and quality of reservoirs, and their anticipated recoveries. The economic, geological and technical factors used to estimate reserves may change from period to period. Reserve estimates are prepared in accordance with the Canadian Oil and Gas Evaluation Handbook and are reviewed by third party reservoir engineers.

Estimates of oil and gas reserves are inherently imprecise, require the application of judgment and are subject to regular revision, either upward or downward, based on new information such as from the drilling of additional wells, observation of long-term reservoir performance under producing conditions and changes in economic factors, including product prices, contract terms or development plans.

Changes in reported reserves can impact property, plant and equipment impairment calculations, estimates of depletion and the provision for decommissioning obligations due to changes in expected future cash flows based on estimates of proved and probable reserves, production rates, future petroleum and natural gas prices, future costs and the remaining lives and period of future benefit of the related assets.

b) Identification of cash-generating units

Management reviews the CGU determination on a periodic basis. The recoverability of property, plant and equipment carrying values are assessed at the CGU level. Determination of what constitutes a CGU is subject to management judgments. The asset composition of a CGU can directly impact the recoverability of the related assets.

c) Estimation of fair value of stock options

The Black-Scholes option pricing model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option pricing models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company's employee's stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. By their nature, these estimates are subject to measurement uncertainty and the effect on the consolidated financial statements of changes of estimates in future periods could be significant.

Key sources of estimation uncertainty

The following are the key assumptions concerning the key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing adjustments to the carrying amounts of assets and liabilities within the next financial year.


--  Estimates of recoverable quantities of proved and probable reserves
    include judgmental assumptions and the economic, geological and
    technical factors used to estimate reserves may change from period to
    period. 

--  Forward price estimates of the oil and natural gas prices are used in
    the impairment model. Commodity prices have fluctuated widely in recent
    years due to global and regional factors including supply and demand
    fundamentals, inventory levels, weather, economic and geopolitical
    factors.

--  The impairment model uses discount rate to calculate the net present
    value of cash flows based on weighted average cost of capital estimates.
    Changes in the general economic environment could result in significant
    changes in this estimate. 

--  Amounts recorded from joint venture partners are based on the Company's
    interpretation of underlying agreements and may be subject to joint
    approval. The Company has recorded balances due from its joint venture
    partners based on costs incurred and its interpretation of allowable
    expenditures. Any adjustment required as a result of joint venture
    audits are recorded in the period of the determination with joint
    venture partners. 

--  The provision for site restoration and abandonment is based on current
    legal and constructive requirements, technology, price levels and
    expected plans for remediation. Actual costs and cash outflows can
    differ from estimates because of changes in laws and regulations, public
    expectations, prices and discovery and analysis of site conditions and
    changes in clean-up technology. 

The above judgments, estimates and assumptions relate primarily to unsettled transactions and events as of the date of the consolidated financial statements. Actual results could differ from these estimates and the differences could be material.

3. Exploration and evaluation assets


----------------------------------------------------------------------------
                                                      June 30,  December 31,
                                                         2011          2010
----------------------------------------------------------------------------
Balance, beginning of period                     $  7,371,582 $  11,662,047
Additions to exploration and evaluation assets      4,671,076     3,793,883
Transfers to property, plant and equipment           (144,010)   (4,385,834)
Unsuccessful exploration and evaluation costs      (2,916,217)   (3,698,514)
----------------------------------------------------------------------------
Balance, end of period                           $  8,982,431 $   7,371,582
----------------------------------------------------------------------------
----------------------------------------------------------------------------

During the six month period ended June 30, 2011, the Company expensed $2,915,699 of exploration and evaluation costs of which $2,915,699 related to the Marian Baker et al, No 1 drilled during the period ended March 31, 2011 that did not encounter hydrocarbons as well as an adjustment to the valuation of the Las Animas prospect.

4. Petroleum and natural gas properties and equipment


----------------------------------------------------------------------------
                                 Development                                
                                & Production       Corporate                
                                      Assets          Assets          Total
----------------------------------------------------------------------------
Cost                                                                        
Balance, January 1, 2010     $    24,205,722 $       730,209 $   24,935,931
Additions                          3,465,058          77,794      3,542,852
Disposals                           (671,761)              -       (671,761)
Transfers from E&E                 4,385,834               -      4,385,834
----------------------------------------------------------------------------
Balance, December 31, 2010   $    31,384,853 $       808,003 $   32,192,856
Additions                          3,026,363          18,879      3,045,242
Disposal                             (47,446)              -        (47,446)
Transfers from E&E                   144,010               -        144,010
----------------------------------------------------------------------------
Balance, June 30, 2011       $    34,507,780 $       826,882 $   35,334,662
----------------------------------------------------------------------------


---------------------------------------------------------------------------
                                  Development &                            
                                     Production     Corporate              
                                         Assets        Assets         Total
---------------------------------------------------------------------------
Accumulated Depletion and                                                  
 Depreciation                                                              
Balance, January 1, 2010          $           - $     387,698 $     387,698
Depletion and depreciation            2,094,080       151,516     2,245,596
Impairment                              179,700             -       179,700
Reversal of impairment                        -             -             -
---------------------------------------------------------------------------
Balance, December 31, 2010        $   2,273,780 $     539,214 $   2,812,994
Depletion and depreciation            1,325,307        73,947     1,399,254
Impairment                               73,183             -        73,183
Reversal of impairment                     (519)            -          (519)
---------------------------------------------------------------------------
Balance, June 30, 2011            $   3,671,751 $     613,161 $   4,284,912
---------------------------------------------------------------------------


Carrying amounts                                                            
At January 1, 2010                 $  24,205,722 $    342,511 $  24,548,233
At December 31, 2010               $  29,111,073      268,789    29,379,862
At June 30, 2011                   $  30,836,029      213,721    31,049,750

Future development costs of proved undeveloped reserves of $3,288,500 were included in the depletion calculation at June 30, 2011 and $9,292,700 for the period ended December 31, 2010.

During the three and six months ended June 30, 2011 the Company did not capitalized general and administrative expenses (June 30, 2010 - $39,751 and $190,069) directly relating to exploration and development activities of which $6,799 and 150,265 related to stock based compensation for the three and six months ended June 30, 2010.

5. Decommissioning Liabilities

The following table presents the reconciliation of the beginning and ending aggregate carrying amount of the obligation associated with the retirement of oil and gas properties:


                                                                 Year ended
                                                         June   December 31,
                                                     30, 2011          2010
                                                 ---------------------------
Decommissioning liabilities, beginning of period    $ 807,754     $ 706,541
Obligations incurred                                   93,726        75,928
Change in estimate                                    113,493             -
Obligations settled                                  (230,325)            -
Unwinding of the discount                              13,194        25,285
                                                 ---------------------------
Decommissioning liabilities, end of period          $ 797,842     $ 807,754
                                                 ---------------------------
                                                 ---------------------------

The undiscounted amount of cash flows, required over the estimated reserve life of the underlying assets, to settle the obligation, adjusted for inflation, is estimated at $907,166 (December 31, 2010 - $1,032,726). The obligation was calculated using a risk free discount rate of 4 percent and an inflation rate of 3 percent. It is expected that this obligation will be funded from general Company resources at the time the costs are incurred with the majority of costs expected to occur between 2012 and 2030.

6. Share Capital

(a) Authorized

Unlimited number of voting common shares.

(b) Issued


                                Six Months Ended              Year Ended    
                                 June 30, 2011            December 31, 2010 
                             Shares       Amounts       Shares      Amounts
Opening balance common                                                      
 shares                 164,319,000 $  75,013,680  119,319,000 $ 46,423,526
Exercise of stock                                                           
 options (i)                 25,000         2,975                           
Private placement (ii)            -             -   45,000,000   28,590,154
----------------------------------------------------------------------------
Balance end of year     164,344,000    75,016,655  164,319,000   75,013,680
----------------------------------------------------------------------------
Opening balance                                                             
 warrants                         -             -   19,800,000    3,870,000
Expired common                                                              
 warrants (iii)                   -             -  (19,800,000)  (3,870,000)
----------------------------------------------------------------------------
Balance end of year               -             -            -            -
----------------------------------------------------------------------------
                                    $  75,016,655              $ 75,013,680
----------------------------------------------------------------------------
(i) The Company issued 25,000 common shares as a result of exercised stock  
options.                                                                    
(ii) The Company issued 45,000,000 common shares in a private placement at  
approximately $0.67 (United Kingdom 42 pence per common share). Pursuant to 
this private placement, the Company incurred $1,545,896 of share issuance   
costs.                                                                      
(iii) 18,000,000 warrants for the purchase of 19,800,000 common shares have 
expired as at December 31, 2010.                                            

(c) Stock options

The maximum number of common shares for which options may be granted, together with shares issuable under any other share compensation arrangement of the Company, is limited to 10% of the total number of outstanding common shares (plus common shares that would be outstanding upon the exercise of all exchangeable rights) at the time of grant of any option. The exercise price of each option may not be less than the fair market value of the Company's common shares on the date of grant. Except as otherwise determined by the Board and subject to the limitation that the stock options may not be exercised later than the expiry date provided in the relevant option agreement but in no event later than 10 years (or such shorter period required by a stock exchange) from their date of grant, options cease to be exercisable: (i) immediately upon a participant's termination by the Company for cause, (ii) 90 days (30 days in the case of a participant engaged in investor relations activities) after a participant's termination from the Company for any other reason except death and (iii) one year after a participant's death. Subject to the Board's sole discretion in modifying the vesting of stock options, stock options will vest, and become exercisable, as to 331/3% on the first anniversary of the date of grant and 331/3% on each of the following two anniversaries of the date of grant. All options granted to a participant but not yet vested will vest immediately upon a change of control or upon the Company's termination of a participant's employment without cause. A summary of the Company's stock option plan as at June 30, 2011 and December 31, 2010 and changes during the respective years ended on those dates is presented below:


                                                          Year ended        
                               June 30, 2011           December 31, 2010    
                                          Weighted                  Weighted
                              Number       Average       Number      Average
                                  of      Exercise           of     Exercise
Stock Options                Options         price      Options        price
----------------------------------------------------------------------------
Beginning of period       12,635,000  $       0.28   5,371,667   $      0.62
Granted                            -             -   7,970,000          0.07
Exercised                    (25,000)         0.07           -             -
Forfeited                 (1,070,000)         0.08    (706,667)         0.66
                        ----------------------------------------------------
End of period             11,540,000  $       0.29  12,635,000   $      0.28
                        ----------------------------------------------------
Exercisable, end of                                                         
 period                    6,863,331  $       0.44   4,418,333   $      0.63
                        ----------------------------------------------------


                                     Weighted
                  Number Out-       Remaining
                    standing          Average                        Number
                       as at   Exer-      Con-                  Exercisable
                     June 30,  cise  tractual                       June 30,
Date of Grant           2011  Price      Life     Date of Expiry       2011
---------------------------------------------------------------------------
January 31, 2007   2,025,000 $ 0.50      5.59   January 31, 2017  2,025,000
December 12, 2007  1,900,000 $ 0.79      6.46  December 12, 2017  1,900,000
April 7, 2008        500,000 $ 0.59      6.78      April 7, 2018    500,000
August 11, 2008      220,000 $ 0.44      7.12    August 11, 2018    146,666
April 9, 2010      6,225,000 $ 0.07      8.78      April 9, 2020  2,074,999
April 12, 2010       400,000 $ 0.07      8.79     April 12, 2020    133,333
May 19, 2010         250,000 $ 0.07      8.89       May 19, 2020     83,333
September 14, 2010    20,000 $ 0.35      9.22 September 14, 2020          -
----------------------------------------------------------------------------
                  11,540,000             7.73                     6,863,331

No options were granted during the six months period ended June 30, 2011. During the year ended December 31, 2010, 7,950,000 options were granted at a fair value of $0.05 per option and 20,000 options were granted at a fair value of $0.24 per option. The fair value of these options was determined using the Black-Sholes model with the following assumptions:


                                               -------
                      Dividend yield               Nil
                      Expected volatility         115%
                      Risk free rate of return   4.00%
                      Weighted average life    3 years
                      Forfeiture rate             9.5%

(d) Contributed surplus

The following table presents the changes in contributed surplus:



                                                June 30,        December 31,
                                                   2011                2010
----------------------------------------------------------------------------
Balance, beginning of period                $ 9,363,598         $ 5,175,086
Expired broker warrants(i)                            -           3,870,000
Exercise of stock options                        (1,225)                  -
Stock based compensation                         41,574             318,512
----------------------------------------------------------------------------
Balance, end of period                      $ 9,403,947         $ 9,363,598
----------------------------------------------------------------------------
(i) During the period ended December 31, 2010 19,800,000 warrants expired   
with a value of $3,870,000.                                                 

(e) Non-controlling interest


                                                           June     December
                                                       30, 2011     31, 2010
----------------------------------------------------------------------------
Opening balance non-controlling interest                                    
 (exchangeable rights) (i)                           26,502,000   26,502,000
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Balance end of period                                26,502,000   26,502,000
----------------------------------------------------------------------------
(i) Management has a non-controlling interest in the Company which allows   
shares of Caza Petroleum, Inc. to be exchanged into the Company's shares at 
an exchange rate of 2800 to 1.                                              

7. Related Party Transactions

The aggregate amount of expenditures made to related parties:

During the years 2010 and 2011, Singular Oil & Gas Sands, LLC ("Singular") agreed to participate in the drilling of the Matthys McMillan Gas Unit #2 and the O B Ranch #1 and 2 wells located in Wharton County, Texas. Under the terms of that agreement, Singular paid 14.01% of the drilling costs through completion to earn a 10.23% net revenue interest on the Matthys McMillan Gas Unit #2 well and paid 12.5% of the drilling costs to earn a 6.94% net revenue interest on the O B Ranch #1 well. Under the terms of the agreement of the O B Ranch #2 Singular paid 9.375% of the drilling costs to earn approximately 6.8% net revenue interest. This participation was in the normal course of Caza's business and on the same terms and conditions to those of other joint venture partners. Singular owes the Company $57,676 in joint venture partner receivables as at June 30, 2011 (December 31, 2010 - $19,968; January 1, 2010 - $7,819). Singular is a related party as it is a company under common control with Zoneplan Limited, which is a significant shareholder of Caza.

All related party transactions are in the normal course of operations and have been measured at the agreed to exchange amounts, which is the amount of consideration established and agreed to by the related parties and which is comparable to those negotiated with third parties.

Cash remuneration of key management personnel of the Company, which includes directors, officers and other key personnel, is set out below in aggregate:


                                                 Six months            Year
                                                      ended           ended
                                                    June 30,    December 31,
                                                       2011            2010
----------------------------------------------------------------------------
Salaries and wages                          $       531,593  $    1,116,451
Short term benefits                                       -               -
Share-based payments                                      -         281,750
----------------------------------------------------------------------------
Total compensation                          $       531,593  $    1,398,201
----------------------------------------------------------------------------
----------------------------------------------------------------------------

8. Supplementary Information

(a) net change in non-cash working capital


                                                   Six months ended June 30,
                                                     2011              2010
---------------------------------------------------------------------------
Provided by (used in)                                                      
-----------------------------                                              

Accounts receivable                              (942,329)        1,758,966
Prepaid and other                                 104,379           129,089
Accounts payable and accrued                                               
 liabilities                                      (15,120)         (587,065)
                                       ------------------------------------
                                                 (853,070)        1,300,990
                                       ------------------------------------
Summary of changes                                                         
Operating                                         716,012          (429,816)
Investing                                      (1,569,082)        1,730,806
                                       ------------------------------------
                                                 (853,070)        1,300,990
                                       ------------------------------------

(b) supplementary cash flow information


                      Six months ended    Six months ended
                         June 30, 2011       June 30, 2010
----------------------------------------------------------
Interest paid       $                -  $                -
Interest received               13,038                 300

(c) cash and cash equivalents


                                June 30, 2011   December 31, 2010
-----------------------------------------------------------------
Cash on deposit           $         2,191,507 $         3,010,615
Money market instruments           22,341,944          30,875,285
                          ---------------------------------------
Cash and cash equivalents $        24,533,451 $        33,885,900
                          ---------------------------------------
                          ---------------------------------------

The money market instruments bear interest at a rate of 0.04% as at June 30, 2011 (December 31, 2010 - 0.136%). Cash on deposit is held with Wells Fargo Bank Texas and the money market account is a fund managed by Wells Fargo Brokerage Services, LLC investing in U.S. Treasury Bill securities.

9. Capital Risk Management

The Company's objectives when managing capital is to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders. The Company defines capital as shareholder equity, working capital and credit facilities when available. The Company manages the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets. The Company's objective is met by retaining adequate equity and working capital to provide for the possibility that cash flows from assets will not be sufficient to meet future cash flow requirements. The Board of Directors does not establish quantitative return on capital criteria for management; but rather promotes year over year sustainable profitable growth.


                                    June 30,    December 31,      January 1,
                                       2011            2010            2010
---------------------------------------------------------------------------
Cash and cash equivalents   $    24,533,451 $    33,885,900 $     9,268,547
Other current assets              3,684,380       2,846,430       4,251,999
Accounts payable and                                                       
 accrued liabilities             (7,347,123)     (7,362,243)     (5,144,083)
---------------------------------------------------------------------------
Net working capital         $    20,870,708 $    29,370,087 $     8,376,463
Shareholders' equity        $    60,105,046 $    65,313,777 $    43,880,202
                            -----------------------------------------------
Total capital               $    39,234,338 $    35,943,690 $    35,503,739
---------------------------------------------------------------------------

The Company has evaluated its net working capital balance as at December 31, 2010. Due to long lead times on several of the Company's exploration and development projects, from time to time the Company secures capital to fund its investments in petroleum and natural gas exploration projects in advance which has resulted in a net working capital balance. As exploration and development projects progress the Company expects the net working capital balance to significantly decrease from current levels, and additional capital may be required to fund additional projects. If the Company is unsuccessful in raising additional capital, the Company may have to sell or farm out certain properties. If the Company cannot sell or farm out certain properties, it will be unable to participate with joint venture partners and may forfeit rights to some of its properties.

10. Financial Instruments

The Company holds various forms of financial instruments. The nature of these instruments and the Company's operations expose the Company to commodity price, credit, and foreign exchange risks. The Company manages its exposure to these risks by operating in a manner that minimizes its exposure to the extent practical.

(a) Commodity Price Risk

The Company is subject to commodity price risk for the sale of natural gas. The Company may enter into contracts for risk management purposes only, in order to protect a portion of its future cash flow from the volatility of natural gas and natural gas liquids commodity prices. To date the Company has not entered into any forward commodity contracts.

(b) Credit Risk

Credit risk arises when a failure by counter parties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the balance sheet date. A majority of the Company's financial assets at the balance sheet date arise from natural gas liquids and natural gas sales and the Company's accounts receivable that are with these customers and joint venture participants in the oil & natural gas industry. Industry standard dictates that commodity sales are settled on the 25th day of the month following the month of production. The Company's natural gas and condensate production is sold to large marketing companies. Typically, the Company's maximum credit exposure to customers is revenue from two months of sales. During the three and six month ended period June 30, 2011, the Company sold 61.58% and 67.77% respectively (three and six months ended June 30, 2010 - 55.01% and 46.98% respectively) of its natural gas and condensates to a single purchaser. These sales were conducted on transaction terms that are typical for the sale of natural gas and condensates in the United States. In addition, when joint operations are conducted on behalf of a joint venture partner relating to capital expenditures, costs of such operations are paid for in advance to the Company by way of a cash call to the partner of the operation being conducted.

Caza management assesses quarterly whether there should be any impairment of the financial assets of the Company. At June 30, 2011, the Company had overdue accounts receivable from certain joint interest partners of $21,041 which were outstanding for greater than 60 days and $193,277 that were outstanding for greater than 90 days. At June 30, 2011, the Company's two largest joint venture partners represented approximately 36% and 7% of the Company's receivable balance (December 31, 2010 25% and 15% respectively). The maximum exposure to credit risk is represented by the carrying amount on the balance sheet of cash and cash equivalents, accounts receivable and deposits. The Company has their checking and money markets accounts with Wells Fargo Bank Texas, N.A. The money market is backed by United States treasury bills.

(c) Foreign Currency Exchange Risk

The Company is exposed to foreign currency exchange fluctuations, as certain general and administrative expenses are or will be denominated in Canadian dollars and United Kingdom pounds sterling. The Company's sales of oil and natural gas are all transacted in US dollars. At June 30, 2011, the Company considers this risk to be relatively limited and not material and therefore does not hedge its foreign exchange risk.

(d) Fair Value of Financial Instruments

The Company has determined that the fair values of the financial instruments consisting of cash and cash equivalents, accounts receivable and accounts payable are not materially different from the carrying values of such instruments reported on the balance sheet due to their short-term nature.

IFRS establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are described below:


--  Level 1: Values based on unadjusted quoted prices in active markets that
    are accessible at the measurement date for identical assets or
    liabilities. 

--  Level 2: Values based on quoted prices in markets that are not active or
    model inputs that are observable either directly or indirectly for
    substantially the full term of the asset or liability. 

--  Level 3: Values based on prices or valuation techniques that require
    inputs that are both unobservable and significant to the overall fair
    value measurement. 

The Company's cash and cash equivalents, which are classified as held for trading, are categorized as Level 1 financial instruments.

All other financial assets are classified as loans or receivables and are accounted for on an amortized cost basis. All financial liabilities are classified as other liabilities. There are no financial assets on the balance sheet that have been designated as available-for-sale. There have been no changes to the aforementioned classifications during the periods presented.

(e) Liquidity Risk

Liquidity risk includes the risk that, as a result of our operational liquidity requirements:


--  The Company will not have sufficient funds to settle a transaction on
    the due date; 
--  The Company will be forced to sell assets at a value which is less than
    what they are worth; or 
--  The Company may be unable to settle or recover a financial asset at all.

The Company's operating cash requirements including amounts projected to complete the Company's existing capital expenditure program are continuously monitored and adjusted as input variables change. These variables include but are not limited to, available bank lines, natural gas production from existing wells, results from new wells drilled, commodity prices, cost overruns on capital projects and regulations relating to prices, taxes, royalties, land tenure, allowable production and availability of markets. As these variables change, liquidity risks may necessitate the Company to conduct equity issues or obtain project debt financing. The Company also mitigates liquidity risk by maintaining an insurance program to minimize exposure to insurable losses. The financial liabilities as at June 30, 2011 that subject the Company to liquidity risk are accounts payable and accrued liabilities. The contractual maturity of these financial liabilities is generally the following sixty days from the receipt of the invoices for goods of services and can be up to the following next six months. Management believes that current working capital will be adequate to meet these financial liabilities as they become due.

11. Transition to IFRS

The Company has adopted IFRS effective January 1, 2010 (the "transition date") and has prepared its opening IFRS balance sheet as at that date. Prior to the adoption of IFRS the Company prepared its financial statements in accordance with Canadian generally accepted accounting principles ("Canadian GAAP"). The Company's consolidated financial statements for the year ending December 31, 2011 will be the first annual financial statements that comply with IFRS. The Company will ultimately prepare its opening IFRS balance sheet by applying existing IFRS with an effective date of December 31, 2011 or prior. Accordingly, the opening IFRS balance sheet and the December 31, 2010 comparative balance sheet presented in the consolidated financial statements for the year ending December 31, 2011 may differ from those presented at this time.

IFRS 1 requires the presentation of comparative information as at the January 1, 2010 transition date and subsequent comparative periods as well as the consistent and retrospective application of IFRS accounting policies. To assist with the transition, the provisions of IFRS 1 allow for certain mandatory and optional exemptions for first-time adopters to alleviate the retrospective application of all IFRSs.

Elected exemptions from full retrospective application

In preparing these consolidated financial statements in accordance with IFRS 1, "First-time Adoption of International Financial Reporting Standards" ("IFRS 1"), the Company has applied certain of the optional exemptions from full retrospective application of IFRS. The optional exemptions applied are described below:

a) Deemed cost for oil and gas assets

The Company has elected to measure oil and gas assets previously recorded in the full cost pool under Accounting Guidelines 16, "Oil and Gas Accounting - Full Cost" ("AcG 16") of Canadian GAAP at the transition date as follows:

i) the full cost pool was allocated to development and production assets pro rata using proved plus probable reserve values.

b) Decommissioning liabilities included in the cost of property and equipment

The Company has elected to measure decommissioning liabilities as at the transition date in accordance with IAS 37, "Provisions, Contingent Liabilities and Contingent Assets" ("IAS 37") and recognize directly in deficit the difference between that amount and the carrying amount of those liabilities at the date of transition determined under Canadian GAAP.

c) Business combinations

The Company has applied the business combinations exemption in IFRS 1 to not apply IFRS 3, "Business Combinations" ("IFRS 3") retrospectively to past business combinations. Accordingly, the Company has not restated business combinations that took place prior to the transition date.

d) Share-based payment transactions

The Company has elected not to apply IFRS 2, "Share-based Payments" ("IFRS 2") to equity instruments granted after November 7, 2002 that have not vested by the transition date.

e) Borrowing costs

The Company has applied the borrowing costs exemption in IFRS to not apply IAS 23, "Borrowing Costs" ("IAS 23") retrospectively to past borrowing costs related to transactions that took place prior to the transition date.

Mandatory exceptions to retrospective application

a) Estimates

Hindsight was not used to create or revise estimates and accordingly the estimates previously made by the Company under Canadian GAAP are consistent with their application under IFRS.

The remaining IFRS 1 exemptions were not applicable or material to the preparation of Caza's Consolidated Balance Sheet at the date of transition on January 1, 2010.

The following reconciliations present the adjustments made to the Company's Canadian GAAP financial results of operations and financial position to comply with IFRS. A summary of the significant accounting policy changes and applicable exemptions are discussed following the reconciliations. Reconciliations include the Company's Consolidated Balance Sheets as at January 1, 2010, June 30, 2010 and December 31, 2010, and Consolidated Statements of Earnings, Comprehensive Loss, and Deficit for the three and six months ended June 30, 2010 and the year ended December 31, 2010.


Caza Oil & Gas, Inc.
Condensed Consolidated Statement of Financial Position
As at January 1, 2010

                                                   Effect of               
                                     Canadian     Transition               
                                         GAAP        to IFRS           IFRS
---------------------------------------------------------------------------
Assets                                                                     

Current                                                                    
  Cash and cash equivalents    $    9,268,547 $            - $    9,268,547
  Accounts receivable               3,973,085              -      3,973,085
  Prepaid and other                   278,914              -        278,914

Exploration and evaluation                                                 
 assets                                     -     11,662,047     11,662,047
Petroleum and natural gas                                                  
 properties and equipment          36,201,223    (11,652,990)    24,548,233
                               --------------------------------------------

Total Assets                   $   49,721,769 $        9,057 $   49,730,826
                               --------------------------------------------
Liabilities                                                                

Current                                                                    
  Accounts payable and accrued                                             
   liabilities                 $    5,144,083 $            - $    5,144,083

Decommissioning liabilities           549,450        157,091        706,541
                               --------------------------------------------
Total Liabilities                   5,693,533        157,091      5,850,624
Equity                                                                     
  Share capital                    51,212,097       (918,571)    50,293,526
  Contributed surplus               4,805,074        370,012      5,175,086
  Deficit                         (11,988,935)      (518,046)   (12,506,981)
  Non-controlling interest                  -        918,571        915,571
                               --------------------------------------------
Total Equity                       44,028,236       (148,034)    43,880,202
                               --------------------------------------------

Total Liabilities and Equity   $   49,721,769 $        9,057 $   49,730,826
                               --------------------------------------------


Caza Oil & Gas, Inc.
Condensed Consolidated Statement of Financial Position
As at June 30, 2010

                                                   Effect of               
                                     Canadian     Transition                
                                         GAAP         to IFRS          IFRS
---------------------------------------------------------------------------
Assets                                                                     

Current                                                                    
  Cash and cash equivalents    $    9,375,345 $            - $    9,375,345
  Accounts receivable               2,214,119              -      2,214,119
  Prepaid and other                   149,825              -        149,825

Exploration and evaluation                                                 
 assets                                     -      9,646,511      9,646,511
Petroleum and natural gas                                                  
 properties and equipment          35,796,827    (12,476,349)    23,320,478
                               --------------------------------------------

Total Assets                   $   47,536,116 $   (2,829,838) $  44,706,278
                               --------------------------------------------
Liabilities                                                                

Current                                                                    
  Accounts payable and accrued                                              
   liabilities                 $    4,557,018 $            - $    4,557,018

Decommissioning liabilities           639,689        161,120        800,809
                               --------------------------------------------
Total Liabilities                   5,196,707        161,120      5,357,827
Equity                                                                     
  Share capital                    51,212,097       (918,571)    50,293,526
  Contributed surplus               5,125,478        228,257      5,353,735
  Deficit                         (13,998,166)    (2,363,131)   (16,361,297)
  Non-controlling interest                  -         62,487         62,487
                               --------------------------------------------
Total Equity                       42,339,409     (2,990,958)    39,348,451
                               --------------------------------------------

Total Liabilities and Equity   $   47,536,116 $   (2,829,838) $  44,706,278
                               --------------------------------------------


Caza Oil & Gas, Inc.
Condensed Consolidated Statement of Financial Position
As at December 31, 2010

                                                   Effect of               
                                     Canadian     Transition               
                                         GAAP        to IFRS           IFRS
---------------------------------------------------------------------------
Assets                                                                     

Current                                                                    
  Cash and cash equivalents     $  33,885,900 $            -  $  33,885,900
  Accounts receivable               2,554,913              -      2,554,913
  Prepaid and other                   291,517              -        291,517

Exploration and evaluation                                                 
 assets                                     -      7,371,582      7,371,582
Petroleum and natural gas                                                  
 properties and equipment          39,637,241    (10,257,379)    29,379,862
                               --------------------------------------------

Total Assets                    $  76,369,571 $   (2,885,797) $  73,483,774
                               --------------------------------------------
Liabilities                                                                

Current                                                                    
  Accounts payable and accrued                                              
   liabilities                  $   7,362,243 $            -  $   7,362,243

Decommissioning liabilities           627,639        180,115        807,754
                               --------------------------------------------
Total Liabilities                   7,989,882        180,115      8,169,997
Equity                                                                     
  Share capital                    75,932,251       (918,571)    75,013,680
  Contributed surplus               9,190,226        173,372      9,363,598
  Deficit                         (16,742,788)    (5,957,474)   (22,700,262)
  Non-controlling interest                  -      3,636,761      3,636,761
                               --------------------------------------------
Total Equity                       68,379,689     (3,065,912)    65,313,777
                               --------------------------------------------

Total Liabilities and Equity   $   76,369,571 $   (2,885,797) $  73,483,774
                               --------------------------------------------


Caza Oil & Gas, Inc.
Condensed Consolidated Statement of Comprehensive Loss
Three months ended June 30, 2010

                                                   Effect of               
                                    Canadian      Transition               
                                        GAAP         to IFRS           IFRS
---------------------------------------------------------------------------
Revenue                                                                    
  Petroleum and natural gas    $      398,883 $            - $      398,883
  Gain on sale of assets                    -        728,239        728,239
  Interest income                         137              -            137
                               --------------------------------------------
                               $      399,020 $      728,239 $    1,127,259
                               --------------------------------------------
Expenses                                                                   
  Production                   $      164,395 $            - $      164,395
  General and administrative        1,068,032         10,707      1,078,739
  Depletion, depreciation,                                                  
   amortization, accretion and                                              
   impairment                         646,820       (646,820)             -
  Depletion, depreciation and                                               
   amortization                             -        517,450        517,450
  Financing costs - unwinding                                               
   of the discounts                         -          6,322          6,322
                                    1,879,247       (112,341)     1,766,906
                               --------------------------------------------
Net loss and comprehensive                                                 
 loss                          $   (1,480,227) $     840,580 $     (639,647)
                               --------------------------------------------


Caza Oil & Gas, Inc.
Condensed Consolidated Statement of Comprehensive Loss
Six months ended June 30, 2010

                                                   Effect of               
                                     Canadian  Transition to               
                                         GAAP           IFRS           IFRS
---------------------------------------------------------------------------
Revenue                                                                    
  Petroleum and natural gas    $    1,095,548 $            -  $   1,095,548
  Gain on sale of assets                    -        728,239        728,239
  Interest income                         300              -            300
                               --------------------------------------------
                               $    1,095,848 $      728,239  $   1,824,087
                               --------------------------------------------
Expenses                                                                   
  Production                   $      409,100 $            -  $     409,100
  General and administrative        1,274,181        (53,380)     1,220,801
  Depletion, depreciation,                                                 
   amortization, accretion and                                             
   impairment                       1,421,798     (1,421,798)             -
  Depletion, depreciation and                                             
   amortization                             -      1,193,429      1,193,429
  Financing costs - unwinding                                              
   of the discounts                         -         12,643         12,643
  Exploration and evaluation                                               
   impairment                               -      3,698,514      3,698,514
                               --------------------------------------------
                                    3,105,079      3,429,408      6,534,487
                               --------------------------------------------
Net loss and comprehensive                                                 
 loss                          $   (2,009,231) $  (2,701,169) $  (4,710,400)


Caza Oil & Gas, Inc.
Condensed Consolidated Statement of Comprehensive Loss
Year ended December 31, 2010

                                    Previous       Effect of               
                                    Canadian   Transition to               
                                        GAAP            IFRS           IFRS
---------------------------------------------------------------------------
Revenue                                                                    
  Petroleum and natural gas    $    2,233,682  $           -  $   2,233,682
  Interest and other income             4,723              -          4,723
  Gain on sale of assets                    -        728,239        728,239
                               --------------------------------------------
                               $    2,238,405  $     728,239  $   2,966,644
                               --------------------------------------------
Expenses                                                                   
  Production                   $      718,186  $           -  $     718,186
  General and administrative        3,626,789       (108,124)     3,518,665
  Depletion, depreciation,                                                 
   amortization, accretion and                                             
   impairment                       2,647,283     (2,647,283)             -
  Depletion, depreciation and                                              
   amortization                             -      2,277,384      2,277,384
  Financing costs - unwinding                                              
   of the Discount                          -         25,286         25,286
  Exploration and evaluation                -      3,698,514      3,698,514
  Development impairment                             179,700        179,700
                               --------------------------------------------
                                    6,992,258      3,425,477     10,417,735
                               --------------------------------------------
Net loss and comprehensive                                                 
 loss                          $   (4,753,853) $  (2,697,238) $  (7,451,091)

The following discussion explains the significant differences between Caza's previous GAAP accounting policies and those applied by the Company under IFRS. IFRS policies have been retrospectively and consistently applied except where specific IFRS 1 optional and mandatory exemptions permitted an alternative treatment upon transition to IFRS for first-time adopters. The descriptive note captions below correspond to the adjustments presented in the preceding reconciliations.

Exploration and Evaluation Assets ("E&E")

Under Canadian GAAP, Caza followed AcG-16 under which all costs directly associated with the acquisition of, the exploration for, and the development of natural gas and liquids reserves were capitalized on a prospect cost basis. Costs accumulated within each prospect were depleted using the unit-of-production method based on proved reserves determined using estimated future prices and costs. Upon transition to IFRS, the Company was required to adopt new accounting policies for exploration and development activities.

Under IFRS, exploration and evaluation costs are those expenditures for an area where technical feasibility and commercial viability has not yet been determined. Development costs include those expenditures for areas where technical feasibility and commercial viability has been determined. Caza adopted the IFRS 1 exemption whereby the Company deemed its January 1, 2010 IFRS asset costs to be equal to its previous GAAP historical property, plant and equipment net book value. Accordingly, exploration and evaluation costs were deemed equal to the unproved properties balance and the development costs were deemed equal to the full cost pool balance.

Under IFRS, exploration and evaluation costs are presented on separate line items on the Consolidated Balance Sheet. Under Canadian GAAP these assets are included in the general balance of property and natural gas properties and equipment.

Exploration and evaluation assets at January 1, 2010 were determined to be $11,662,047, representing the unproved properties balance under Canadian GAAP. This resulted in a reclassification of $11,662,047 from petroleum and natural gas properties to exploration and evaluation assets on Caza's Consolidated Balance Sheet as at January 1, 2010 (December 31, 2010 - $7,371,582; June 30, 2010 - $9,646,511). As at the date of transition, the Company tested all of its exploration and evaluation assets for impairment and determined no impairment charges were necessary.

Under Canadian GAAP, exploration and evaluation costs were capitalized as property and equipment in accordance with the CICA's full cost accounting guidelines. Under IFRS, Caza capitalizes these costs initially as exploration and evaluation assets. Once technical feasibility and commercial viability of the area has been determined, the costs are transferred from exploration and evaluation assets to property, plant and equipment. Under IFRS, unrecoverable exploration and evaluation costs associated with an area and costs incurred prior to obtaining the legal rights to explore are expensed.

During the twelve months ended December 31, 2010, Caza transferred $4,563,375 (six months ended June 30, 2010 - $178,513) of exploration and evaluation costs to petroleum and natural gas properties and expensed $3,878,214 (three and six months ended June 30, 2010 - $3,520,972) of unsuccessful exploration and evaluation assets and $12,047 in direct exploration costs.

Depreciation, depletion, amortization and accretion ("DD&A")

Development costs at January 1, 2010 were deemed to be $24,205,722, representing the depletable pool balance under previous GAAP. Consistent with Canadian GAAP, these costs are capitalized as petroleum and natural gas properties under IFRS.

Under Canadian GAAP, development costs were depleted using the unit-of-production method calculated on for each country's cost centers (Caza only had one cost center under Canadian GAAP). Under IFRS, development costs are depleted using the unit-of-production method calculated at the CGU level. The IFRS 1 exemption permitted the Company to allocate development costs to the CGU's using proved and probable reserves values for each area as at January 1, 2010. Depleting on an area basis under IFRS resulted in a $352,671 decrease to Caza's DD&A expense for the twelve months ended December 31, 2010 (three and six months ended June 30, 2010 - $165,495).

Impairments

Under Canadian GAAP, an impairment was recognized if the carrying amount of the full cost pool exceeded the undiscounted cash flows expected from the production of the proved reserves. If the carrying amount of the full cost pool was less than these cash flows, an impairment was recognized as the amount by which the carrying value exceeded the sum of the discounted cash flows expected from the production of the proved and probable reserves. Impairments recognized under previous GAAP were not reversed.

Under IFRS, an impairment is recognized if the carrying value exceeds the recoverable amount for a cash-generating unit. Prospect areas are aggregated into cash-generating units based on their ability to generate independent cash flows. If the carrying value of the cash-generating unit exceeds the recoverable amount, the cash-generating unit is written down with an impairment recognized in net earnings. Impairments recognized under IFRS are reversed when there has been a subsequent increase in the recoverable amount. Impairment reversals are recognized in net earnings and the carrying amount of the cash-generating unit is increased to its revised recoverable amount as if no impairment had been recognized for the prior periods.

At the date of transition, January 1, 2010, the Company recognized an impairment of $nil on its petroleum and natural gas properties which was recorded directly to the opening deficit.

For the twelve months ended December 31, 2010, Caza recognized impairments of $3,878,214 relating to the Company's exploration activities (six months ended June 30, 2010 - $3,698,514). The impairment recognized was based on the difference between the December 31, 2010 net book value of the assets and the recoverable amount. The recoverable amount was determined using fair value less costs to sell based on discounted future cash flows of proved and probable reserves using forecast prices and costs. Under Canadian GAAP, these assets were included in the full cost pool ceiling test, which was not impaired at December 31, 2010.

Divestitures (gain on sale of assets)

Under Canadian GAAP, proceeds from divestitures of producing assets were deducted from the full cost pool without recognition of a gain or loss unless the sale resulted in a change to the depletion rate of 20 percent or greater, in which case a gain or loss was recorded.

Under IFRS, gains or losses are recorded on divestitures and are calculated as the difference between the proceeds and the net book value of the asset disposed. For the twelve months ended December 31, 2010, Caza recognized a $728,239 net gain on divestitures under IFRS compared to previous GAAP results. The net gain arose from the sale of the Glass Ranch properties in Texas.

Decommissioning liabilities

Under Canadian GAAP, asset retirement obligations, referred to as decommissioning liabilities, were measured as the estimated fair value of the retirement and decommissioning expenditures expected to be incurred. The obligations were discounted using a credit adjusted risk free rate. Liabilities were not remeasured to reflect period end discount rates.

Under IFRS, the decommissioning liabilities are measured as the best estimate of the expenditure to be incurred and requires that the decommissioning liabilities be remeasured using the period end discount rate. Under IFRS, a risk free rate is used to discount the obligations.

In conjunction with the IFRS 1 exemption regarding assets discussed above, Caza was required to remeasure its decommissioning liabilities upon transition to IFRS and recognize the difference in the opening deficit. The application of this exemption and the change in discount rates used resulted in a $157,091 increase to the decommissioning liabilities on Caza's Consolidated Balance Sheet as at January 1, 2010.

Subsequent IFRS remeasurements of the obligation are recorded through petroleum and natural gas properties and equipment with an offsetting adjustment to the decommissioning liabilities. As at December 31, 2010, excluding the January 1, 2010 adjustment, Caza's decommissioning liabilities increased by $23,025 (three and six months ended June 30, 2010 - $ $2,015 and $4,030 respectively), which primarily reflects the remeasurement of the obligation using Caza's discount rate of 4.19 percent as at December 31, 2010.

Share based payments

Under Canadian GAAP, Caza accounted for certain stock-based compensation plans whereby the obligation and compensation costs were amortized over the vesting period using the straight line method. For these stock-based compensation plans, IFRS requires the compensation expense for share-based payments be fair valued using an option pricing model, such as the Black-Scholes-Merton model, at each reporting date using the graded method of amortization.

Accordingly, upon transition to IFRS, the Company recorded a fair value adjustment of $370,012 as at January 1, 2010 to increase the contributed surplus with a corresponding charge to the opening deficit. Caza elected not to use the IFRS 1 exemption whereby the liabilities for share-based payments that had vested or settled prior to January 1, 2010 were not required to be retrospectively restated. Subsequent IFRS fair value adjustments are capitalized as appropriate to petroleum and natural gas properties or E&E assets or expensed to exploration and evaluation expenses, and administrative expenses with an offsetting adjustment to contributed surplus.

In addition to the January 1, 2010 adjustment discussed above the IFRS remeasurement costs subsequent to transition decreased the contributed surplus by $196,639 as at December 31, 2010 (three and six months ended June 30, 2010 - $77,666 and $141,754 respectively) in comparison to previous GAAP.

Non-controlling interests

Under Canadian GAAP, the exchangeable rights as described in Note 6(e) were recorded as share capital due to Emerging Issues Committee No. 151 as the rights met the required conditions for this classification. However, under IFRS, the exchangeable rights represent a non-controlling interest in a subsidiary. As a result, there are differences in presentation within shareholders' equity and the statement of comprehensive loss. Additionally, under IFRS, net loss per share is calculated on the total weighted average number of common shares outstanding, excluding the exchangeable rights.

In the course of preparing these condensed consolidated financial statements management identified an error in the application of IFRS on initial adoption. The Company had previously retrospectively recognized its non-controlling interest upon initial adoption of IFRS at January 1, 2010. Management has determined that a prospective application should have been applied. The impact is that non-controlling interest within equity understated by approximately $2.5 million with deficit overstated by a corresponding amount as at January 1, 2010 (December 31, 2010 - $6.4 million). Additionally, the net loss attributable to non-controlling interests for the year ended December 31, 2010 was overstated by $0.3 million with the offset to the net loss attributable to owners of the Company. This has been corrected in these condensed consolidated financial statements and the notes thereto.

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

Contact Information

  • Caza Oil & Gas, Inc.
    Michael Ford
    CEO
    +1 432 682 7424

    Caza Oil & Gas, Inc.
    John McGoldrick
    Chairman
    +1 832 573 1914/+44 7796 861 892
    www.cazapetro.com

    Cenkos Securities plc
    Jon Fitzpatrick
    +44 20 7397 8900 (London)

    Cenkos Securities plc
    Beth McKiernan
    +44 131 220 6939 (Edinburgh)

    M: Communications
    Patrick d'Ancona
    +44 20 7920 2330 (London)

    M: Communications
    Chris McMahon
    +44 20 7920 2330 (London)