Caza Oil & Gas (CAZA)

onshore exploration, development and production in Texas, Louisiana and New Mexico

Current market capitalisation of £78m ($124m) with no debt and current cash of approx. $33m


November 2010, Caza raised £18.9 mln through a placing at 42p per share.

Asset

Arran & Tiree prospects - multi-segment prospect, with prospective reservoirs supported by AVO data within a proven play fairway. 

OB Ranch - 43.28% working interest and an approximate 32.03% net revenue interest in the well

Windham development

Production overview (3Q10 average 845Mcfge/day)

Matthys-McMillan #2  W.I. 19.61%
146bopd and
480Mcfg/day

OB Ranch #1  
2.48 million cubic feet of natural gas per day,
400 barrels of oil per day
190 barrels of water per day

Potential Issues





Dec 8th, the Company -  Marian Baker #1 well on Arran Prospect to a total depth of approximately 16,000 feet beginning (Jan Spurred). Official COS is 35%.

The Marian Baker #1 well is expected to encounter multiple, potential, hydrocarbon bearing reservoir sections.

 For Arran, Australian drilling partners who have carried out an independent assesment and released notes say 650 BCF or higher.There's a production well 350m away from the target.

Upcoming high impact drilling campaign
• Arran – targeting 177Bcf & 3.0MMbbl  Caza 25% W.I. 35.94% after casing point;NRI c.26.24%
• Tiree – targeting 76Bcf & 1.4MMbbl   Caza 25% W.I.32.81% aftercasing point; NRI c.23.95%
• Lewis – targeting 42Bcf & 0.8MMbbl  Caza 50% W.I.



On a 9/64th choke at 6,100 pounds per square inch flowing tubing pressure and still has approximately 750 barrels of fracture fluid to recover. The production rates are being closely monitored, and Caza will provide an update once the rates and flowing tubing pressure have stabilised.

2011 looks an active year for Caza

Upcoming Activities

All eyes on the Arran prospect in Q1. Success at Arran would de-risk Tiree which is significant.

Windham Wolfberry prospect farmed out to Devon Energy







– Complete Caza 158 # 1 frac stimulation
– Commence Caza 162 #1 frac stimulation

– Drill Bongo offset well                                        Caza 65% W.I.
– Commence Bongo development drilling

• Q2 2011
– Drill Tiree prospect

• Other 2011 Activities
– Drill Lewis prospect
– Farm out of Las Animas prospect   Caza 25%* W.I.
– Further Windham wells anticipated







Our Target price for 2011 is 120p. This could be revised upwards based upon future discoveries.


 NAV based on production figures in the last Bongo RNS to add 12.8p per share to the NAV.

NAV prior to windham, bongo and placing to fund future prospects was 45p ish so we're sitting below old NAV before these were added in.

No broker notes have come out yet from CENKOS, so we're waiting for a more official NAV from them.

No exact figures on production costs etc, but $50 per barrel for oil and $2.75 per mcf of gas after tax etc are as good as I've been able to get.