Caza Oil & Gas (LON:CAZA) (TSE:CAZ) is excited about Lennox, the group's latest success in the Bone Spring play in New Mexico.
This morning Caza revealed findings from a program on the recently drilled Lennox 32 #2H well, which showed two of the three Bone Springs sands are commercial at that location.
"From what we've seen so far it is going to be a good well, we're excited about Lennox," chief executive Mike Ford told Proactive Investors.
"The first sand is wet, it is a non commercial zone at this location, but, the second and third sands appear to be very commercial.
"We've drilled the lateral well into the third sand, we have fracture stimulated it and we are flowing that back."
Ford explains that the non-commercial First Sand must be 'squeezed' off before the well starts production. That work is ongoing, once complete a pump will be installed and the well will be brought online.
Caza has a 40% stake (before pay-out) in Lennox which will equate to 31.08% revenue interest, a 50.00% working interest after pay-out. It will participate in future Lennox wells with a 50% working interest.
The company also revealed today that drilled is now underway on its second well on the Copperline property in the Bone Spring play.
Drilling on the horizontal well started on 15 June. The well is a direct offset to the successful Caza Ridge 14 State #3H well.
The primary target is the third Bone Spring Sand interval with potential secondary targets in the Brushy Canyon, Avalon Shale, and first and second Bone Spring Sands.
Caza has a 58.75% working interest, which roughly equates to a 44.80% net revenue interest, in the Caza Ridge 14 State #4H well.
The company has also been busy elsewhere in New Mexico, and has provided updates on the Madera and Roja properties.
The initial well at the Madera property in Lea County is currently drilling the horizontal section of the well. Based on analysis of log data, OXY, the operator, will begin drilling the lateral section of the well through the primary objective third Bone Spring Sand interval to a total measured depth of round 16,839 feet.
Caza has a 20% working interest (15.60% net revenue interest) in the Madera 35 Fed #1H well and the Madera property.
Finally, the initial well on the Roja property, also in Lea County, has reached the intended total measured depth of around 13,568 feet. The well was recently fracture stimulated in multiple stages and is currently flowing back to clean up.
Caza has a 20.00% working interest (15.60% net revenue interest) in the Madera 17 Fed #1H well and the Roja property.
In this morning's statement, Ford said: "The first Caza Ridge well at Copperline was a very good result, which we hope to duplicate with the recently commenced Caza Ridge development well.
The OXY operated Madera and Roja wells are progressing nicely, and we look forward to providing results on these wells and bringing them online in the near future, as well," said Michael Ford, chief executive officer of Caza.
"Lennox, Madera and Roja provide the company with good development potential across expansive lease areas. This should mean repeatable success across multiple oil and liquids-rich zones in the broader Bone Spring play.
"The stacked pay potential for oil and liquids-rich gas is what makes this play so intriguing. It's also the reason management has focused efforts on the play, and what should ultimately make the play successful for Caza and create value for our shareholders," he added.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.