Oil and gas firm Caza has begun drilling on the initial test well at its part-owned Forehand Ranch Prospect in Eddy County, New Mexico.
The well will be drilled to a total vertical depth of around 9,200 ft with a total measured depth of approximately 11,929 ft.
The company holds a 54.83% working interest before pay-out (42.02% net revenue interest) and a 63.00% working interest after pay-out (48.27% net revenue interest) in the well.
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The no.3 horizontal well is also being drilled on the Copperline Prospect in Lea County, New Mexico, to a depth of about 12,027 ft. Once the horizontal section is complete, the well will be fracture stimulated. In this well, Caza has a 45% working interest (35.213% net revenue interest) before payout and a 58.75% working interest (45.972% net revenue interest) after payout.
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In the same region, on the Quail Ridge Prospect, the no.3 horizontal well was successfully fracture stimulated and is currently flowing back hydrocarbons and frac fluids at a gross rate of approximately 2,100 barrels (bbls) per day on a 26/64 inch adjustable choke. The well has averaged 663 bbls of oil and 604 thousand cubic feet of natural gas (Mcf) per day over the past eight days, which is 764 bbls of oil equivalent (Boe). The peak rate day to date was 712 bbls of oil and 623 Mcf, which equals 816 Boe.
Caza has a 0.25% working interest (0.1875% net revenue interest) in the well.
In a statement the firm said: "This is a very positive result and is significant to Caza, because the well offsets the Company's Lynch property. Although Caza's non-operated participation interest is small, this well has helped to de-risk the Company's acreage position and provide us with valuable information for future drilling at Lynch."
Chief Executive Officer Michael Ford added: "We are very pleased to have commenced drilling operations on the Forehand Ranch prospect. This will be our second operated test well with a material participation interest in the exciting Bone Spring horizontal oil play in southeast New Mexico.
"At Copperline, drilling continues on the horizontal section of the Caza Ridge well. As previously announced, log and core data from the well have confirmed the presence of multiple potential pay zones containing oil and liquids-rich natural gas.
"We are also very pleased with the result of the Quail State well and are excited about future drilling on our Lynch property, which is in the adjacent section. This is a very good result and has provided Caza with valuable information in this area."
The share price rose 6.67% to 8.00p in early trading.
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