Monday, July 18, 2011
Crimson Exploration Inc.
Crimson Exploration Inc. on Monday provided an operational update and announced an increase in its 2011 capital program.
In Liberty County, TX, the Catherine Henderson #B-4 (64.0% WI) commenced production at a gross daily rate of 1,379 Boepd, or 721 barrels of condensate, 208 barrels of natural gas liquids and 3.2 Mmcf of natural gas on a 13/64th choke and 7,000 psi of flowing tubing pressure. This well was drilled to a total measured depth of 15,338 feet in the Lower Cook Mountain formation. Approximately one mile to the northwest, Crimson has drilled the Catherine Henderson A-10 (66.0% WI), targeting the Cook Mountain formation, to a total measured depth of 13,742 feet. Completion operations are scheduled to begin by the end of July with first production in early August.
In Zavala County, TX, Crimson completed the KM Ranch #1H (50.0% WI), targeting the Eagle Ford Shale, and has commenced flow-back operations with results expected in mid-August. The well was drilled to a total measured depth of 12,627 feet, including a 5,800 foot lateral and 20 stages of fracture stimulation. The KM Ranch #1H represents Crimson’s first well in Zavala County where Crimson has an estimated 147 drilling locations and approximately 2,300 net acres held by production. Crimson anticipates spudding the KM Ranch #2H (50.0% WI) in the beginning of November subsequent to spudding its first well in the Booth-Tortuga Area, approximately 13 miles to the southwest of the KM #1H, in the beginning of October.
In Karnes County, Texas, Crimson spud the Littlepage McBride #2H (53.0% WI), targeting the Eagle Ford Shale formation, which is drilling at 8,480 feet toward an estimated total measured depth of 15,850 feet. Completion operations are expected to begin mid-third quarter with initial production to follow in September. The Littlepage McBride #2H is located approximately 0.6 miles to the east of the Littlepage McBride #1H well (53.0% WI) which is currently producing 525 Boepd and has produced a cumulative 53,000 Boe since coming online in early April. Due to the success experienced in Karnes County, we have planned a continuous drilling program for the remainder of the year, commencing a well per month beginning in August.
Updated 2011 Capital Program
Crimson’s Board of Directors recently approved increasing its 2011 capital budget to $78 million, a 30% increase, to accelerate oil weighted drilling activities in Zavala, Dimmit and Karnes Counties. This decision was made based on Crimson’s extensive portfolio of drill ready oil opportunities and recent success. The increase in capital expenditures marks the beginning of an Eagle Ford development program that represents a strategic shift to oil and liquids rich projects in proven areas. As a result, preliminary internal forecasts indicate Crimson’s production mix will be over 40% crude oil and natural gas liquids by January 2012 and over 50% crude oil and natural gas liquids by the second quarter of 2012.
Second Quarter 2011 Production
Crimson produced approximately 4.4 Bcfe of natural gas equivalents, or an estimated 48,740 Mcfe per day, during the second quarter 2011, compared with 2.7 Bcfe, or 30,084 Mcfe per day, produced during the second quarter of 2010, a 62% increase period over period. The second quarter production results were in line with management’s guidance.
Crimson Exploration is a Houston, TX-based independent energy company engaged in the acquisition, development, exploitation and production of crude oil and natural gas, primarily in the onshore Gulf Coast regions of the United States. The Company owns and operates conventional properties in Texas, Louisiana, Colorado and Mississippi, approximately 12,000 net acres in the Haynesville Shale, Mid-Bossier, and James Lime plays in San Augustine and Sabine counties in East Texas, approximately 6,700 net acres in the Eagle Ford play in South Texas and approximately 11,000 net acres in the Denver Julesburg Basin of Colorado.
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