Caza Oil & Gas (Caza) has provided an operational update on its activities in the Abo/Wolfcamp horizontal oil play in New Mexico, US, where it has drilled four wells. The first two wells, the Moore Bailout 11 State #1 and Lucky Penny 10 State #1 wells, were discoveries and both continue to produce at rates of approximately 20 barrels per day.

The Bada Bing 23 State #1, the third well in the programme, was drilled to a total measured depth of 12,835ft with a horizontal leg of 4,129ft. The well encountered Abo/Wolfcamp dolomitic and limestone formations and a multi stage fracture stimulation was completed in December 2009. The well continues to flow back completion fluid, but at this stage no hydrocarbons have been evident in the fluid recovered.

The fourth well in the Abo/Wolfcamp horizontal play, Moore Cowbell 27 State #1, has been drilled to a total measured depth of 10,083ft with a horizontal leg of 1,197ft. Although core data indicates a 14ft interval in the Abo zone from 8,679-8,693ft to be pay, the horizontal leg of the well did not encounter any producible reservoir zones. Caza and its partner Wise Oil No 8 are planning a vertical completion within the Abo zone.

Under the definitive participation agreement between Caza and Endeavour International (Endeavour), Endeavour has the option as to whether to elect to participate in Caza’s prospects and has informed the company that it will not participate in any of the company’s wells in Texas and Louisiana and is terminating the participation agreement with effect from April 2010. The company is currently in discussions to farm out these prospects.

The company is planning to spud a development well, the Matthys McMillan GU #2, around the middle of February 2010. Caza holds a 19.61% working interest in the well. The location directly offsets the Matthys McMillan GU #1 well that was completed by Caza in July 2007 and has produced approximately 2.4 BCFGE to date.

Mike Ford, CEO and president of Caza, said: “The result from the Moore Cowbell 27 State #1 well is disappointing and we await the final evaluation of the Bada Bing 23 State #1 well. Caza was carried in each of the four wells in the Abo/Wolfcamp play which has mitigated the Company’s financial exposure. We are evaluating the results of the program to date to establish the viability of the play and our acreage position.

“It is our current intention to focus our resources on the deeper wells scheduled to be drilled in Texas and Louisiana starting with the Matthys McMillan GU #2 well which will be spudded shortly.”