Caza Spotlights Operational, Financial Results for 2Q11

- Caza Spotlights Operational, Financial Results for 2Q11

Monday, August 15, 2011
Caza O&G Inc.

Caza O&G provided 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 endeavors 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."

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Total Depth Reached at Caza's Tx. Well

- Total Depth Reached at Caza's Tx. Well

Thursday, July 28, 2011
Caza O&G Inc.

Caza, as operator, announced that the Caza Elkins 3402 well in Midland County, Texas, reached a total depth of 11,852 feet, and the well was subsequently logged. This log data has confirmed the same multi pay potential for oil and gas in the Spraberry, Wolfcamp, Strawn, Atoka and Mississippian/Devonian formations as is found in the Caza Elkins 3401 well (a direct offset to the Caza Elkins 3402). Caza is currently preparing the Caza Elkins 3402 well for completion operations, which will include a fracture stimulation program.

As previously announced, frac crews are extremely busy in this area. However, Caza was able to secure a frac crew ahead of schedule to perform the fracture stimulation procedure for the Caza Elkins 3401 well, which is now scheduled for today, July 28, 2011. The Company still anticipates the initial fracture stimulation procedure on the Caza Elkins 3402 well to be performed in late August 2011. Caza will update the market once initial flow rates have been established for each well.

The San Jacinto property covers approximately 480 acres with five proven undeveloped locations, including the Caza Elkins 3401 and 3402 locations. Caza has a 100% working interest before completion and an 85% working interest after completion in the Caza Elkins 3401 well with a 63.75% net revenue interest. In all subsequent wells on the San Jacinto property, including the Caza Elkins 3402 well, Caza will have a 75% working interest and a 56.25% net revenue interest.

W. Michael Ford, Caza's Chief Executive Officer commented, "The results of the Caza Elkins 3401 and 3402 wells on the San Jacinto property are positive, and we look forward to fracture stimulating both wells and bringing them into production."

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Caza IDs Potential Pay at O.B. Ranch Well

- Caza IDs Potential Pay at O.B. Ranch Well

Thursday, July 07, 2011
Caza O&G Inc.

Caza O&G provided an operational update on the Company's Bongo Property concerning the O.B. Ranch #2 development well in Wharton County, Texas.

Caza, as operator, announced that the O.B. Ranch #2 development well has reached its target depth of 13,210 feet and electric logs have been obtained through the target depth. The logs indicate potential pay in the Frio, Yegua and targeted Cook Mountain formations.

Data from the logs and core samples from the well have confirmed Caza's geologic and seismic modeling, which hypothesized that the O.B. Ranch #1 discovery well (which originally targeted a deeper Wilcox structure) was producing from the fringe of a more extensive Cook Mountain sand package. The O.B. Ranch #2 development well has been drilled closer to what Caza believes to be the center of the Cook Mountain anomaly with the aim of gaining valuable geologic knowledge of the Bongo/Cook Mountain sand and the regional Cook Mountain sand picture, while adding further production to the Company's portfolio.

The O.B. Ranch #2 is in a higher structural position than the O.B. Ranch #1 well, and log and seismic data support thicker, better sorted, potential pay sands with better porosity within the Cook Mountain section than those found in the O.B. Ranch #1. Due to concerns over existing downhole conditions, Caza was unable to run the micro imaging tool used in the O.B. Ranch #1 well, which helps to identify net effective pay. However, the Company was able to run a high resolution triple combination logging tool, which was more than adequate to define lithology and potential pay sections within the wellbore.

Caza is currently running production casing and preparing the O.B. Ranch #2 well for further completion operations in the Cook Mountain. The completion procedure will include a fracture stimulation program, which is scheduled for the end of July, 2011. The initial rate will be announced following completion of the fracture stimulation procedure.

The log data also indicates potential pay in the shallower Frio and Yegua formations at approximately 5,530 feet and 9,000 feet respectively.

Caza currently has a 45.28% working interest and an approximate 33.51% net revenue interest in the Bongo property and wells.

W. Michael Ford, Caza's Chief Executive Officer commented, "We are very pleased with the results of the O.B. Ranch #2 well. The data from this well has confirmed our scientific model and will be instrumental in efficiently developing the Bongo property. Additionally, Caza is beginning to receive the initial data from our proprietary seismic reprocessing in this area, which looks very promising. The Company currently has several exploration prospects under lease that should benefit from this newly gathered data as should Caza's future exploratory prospect development in Wharton County."

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Caza Reaches TD at Texas Well

- Caza Reaches TD at Texas Well

Thursday, June 23, 2011
Caza O&G Inc.

Caza provided an operational update on the Company's San Jacinto property in Midland County, Texas.

Caza, as operator, announced that the Caza Elkins 3401 well in Midland County, Texas, reached a total depth of 11,854 feet on June 21, 2011. Electric logs indicate multiple potential pay sands for both oil and gas in the Clearfork, Spraberry, Wolfcamp, Strawn, Atoka and Devonian formations. Caza is currently running production casing and preparing the Caza Elkins 3401 well for further completion operations. The completion procedure will include a fracture stimulation program.

The rig has been released and will be moved to the Caza Elkins 3402 well location. The positive results associated with the Caza Elkins 3401 well have caused Caza to revise the target depth on the Caza Elkins 3402 well from 10,500 feet, as previously announced, to approximately 11,800 feet in order to test the Devonian formation. The well should take approximately 30 days to reach the target depth.

Frac crews are extremely busy and therefore difficult to schedule in this area. Given positive results on the Caza Elkins 3402 well, the Company anticipates the initial fracture stimulation procedures on both the Caza Elkins 3401 and 3402 wells to be performed sequentially this August. Given the current environment regarding frac crews, the Company believes that performing these operations sequentially is the most expeditious and economically prudent way forward.

The San Jacinto property covers approximately 480 acres with five proven undeveloped locations, including the Caza Elkins 3401 and 3402 locations. Caza has a 100% working interest before completion and an 85% working interest after completion in the Caza Elkins 3401 well with a 63.75% net revenue interest. In all subsequent wells on the San Jacinto property, including the Caza Elkins 3402 well, Caza will have a 75% working interest and a 56.25% net revenue interest.

W. Michael Ford, Caza's Chief Executive Officer commented, "We are very pleased with the results of the Caza Elkins 3401 well on the San Jacinto property. Log data suggests that the potential pay sections are better than anticipated and we look forward to drilling the Caza Elkins 3402 well and developing this project in due course."

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Caza Board Member to Resign

- Caza Board Member to Resign

Wednesday, June 22, 2011

Caza reported that John Rooney, non-executive director of the Company, has informed the Company of his intention not to stand for re-election and to resign from the Board. His resignation will be effective as of July 12, 2011. The Board of Directors of Caza Oil & Gas has nominated David McManus to stand for election as a non-executive director of the Company. Subject to shareholder approval, David McManus' election will become effective at the Company's annual general meeting currently scheduled for July 12, 2011.

David McManus, aged 57, is a petroleum engineer with over 35 years experience in the Oil and Gas industry. In this time, he has worked for companies including Shell, Ultramar, ARCO and BG group. He has extensive Project Management and commercial expertise at a high level, and is currently a Director of Cape plc, Pioneer Natural Resources UK and Rockhopper Exploration plc. David has a first class honours degree in Civil Engineering from Heriot Watt University.

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Caza Charges Ahead at Texas Wells

- Caza Charges Ahead at Texas Wells

Friday, June 10, 2011
Caza O&G Inc.

Caza provided an operational update on the Company's San Jacinto, Bongo and Windham projects.

San Jacinto Property, Midland County, Texas: Caza, as operator, was able to secure a rig ahead of schedule and is currently drilling the Caza Elkins 3401 well on the San Jacinto (Wolfberry) property. The well has reached the intermediate pipe point at 4,670 feet. Caza will run electric logs and cement the 9 5/8ths inch casing prior to drilling ahead. The well should take approximately 25 more days to drill to a total depth of 11,200 feet and is targeting the Wolfberry, Strawn and Devonian formations, which produce oil in the immediate area. All subsequent wells will be drilled to approximately 10,500 feet to test the Wolfberry and Strawn formations. The Caza Elkins 3402 well will be drilled immediately following the Caza Elkins 3401 well with the same rig. The property covers approximately 480 acres with five proven undeveloped locations.

Caza has a 100% working interest before completion and an 85% working interest after completion in the first well with a 63.75% net revenue interest. In all subsequent wells on the San Jacinto property, Caza will have a 75% working interest and a 56.25% net revenue interest.

Bongo Property, Wharton County, Texas: The O.B. Ranch #2 appraisal well, which is a direct offset to the O.B. Ranch #1 discovery well is drilling ahead and is currently on schedule. Intermediate casing was set at 7,600 feet, and the well is currently drilling at 8,811 feet. The Company is pleased to announce that log data has confirmed the presence of natural gas in the Frio formation at approximately 5,530 feet. The well is targeting the Eocene, Cook Mountain interval between 12,400 and 12,900 feet, which is the stratigraphic interval producing in the O.B. Ranch #1 well, with an anticipated total depth of 13,500 feet. Data from this well will be integrated into Caza's ongoing seismic modelling effort in Wharton County, Texas, which will be used to better understand the potential size of the Cook Mountain anomaly at Bongo, as well as other potential targets in the area.

The Company has also completed remedial operations on the O.B. Ranch #1 well. Since completing the operations, the well is producing in line with Company expectations at average daily rates of 92 barrels of oil, 674 thousand cubic feet of natural gas and 37 barrels of water.

Caza has a 45.28% working interest and a 33.51% net revenue interest in the Bongo property and wells.

Windham Property, Upton County, Texas: The Caza 158 #3 well on the Windham property has reached its target depth of 9,824 feet, and Caza has elected to participate in the operator's proposal to complete the well. The operator intends to perforate and fracture stimulate all potentially productive intervals seen on the logs simultaneously within the wellbore, which include the Spraberry/Wolfcamp, Penn and Strawn formations. The Caza 158 #3 will be 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.

Caza currently has a 25.0% working interest and an 18.75% net revenue interest in the Windham property and wells.

W. Michael Ford, Chief Executive Officer commented, "We are pleased with the status of our ongoing operations at San Jacinto, Bongo and Windham with all three projects progressing on, or ahead of, schedule. The Company is pursuing a balanced strategy of growing both our production and reserve base in order to build further shareholder value, and these projects should provide continued growth in both these areas along with increased revenues. I look forward to updating the market on the progress of these projects, as well as others, in due course."

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