Carrizo Oil & Gas Exceeding Production Goals for 2011

Carrizo Oil & Gas plans to reach 7,000 bopd by the end of 2012 and is already surpassing current production goals. The Eagle Ford and Niobrara shales have added almost all of the liquids production to Carrizo's production mix that was previously dominated by natural gas. Company wide liquids production stands at over 6,000 bopd, so it doesn't look like they'll have any trouble hitting 7,000 bopd with 20+ Eagle Ford wells planned in 2012.

"It may have appeared optimistic when we announced our 5,000 bopd target in mid-2010 given that we were producing approximately 400 bopd at the time and had no production from the Eagle Ford or Niobrara," commented President and CEO S. P. "Chip" Johnson IV, "however I had confidence that our operations staff would be able to quickly ramp production from our leasehold in these two plays. I believe reaching the 5,000 bopd milestone is an outstanding achievement which exemplifies the quality of Carrizo's operations team. The initiation of production from these last eight wells brings our well count to 23 gross producing Eagle Ford wells with another 13 gross wells drilled waiting on completion and 9 gross Niobrara wells producing with one gross well waiting on completion.

GeoResources Well Results and Capital Guidance | 2011-2012

GeoResources expects it will spend approximately $120 million in 2011 and between $188 and $223 million in 2012. Between $74 and $86 million will be spent in Fayette and Gonzales Counties in 2012. Approximately 95% of the company's capital budget is dedicated to the Bakken and Eagle Ford shale development areas. Other highlights include:

  • Drilling a 15,100 ft well including a 5,000 ft lateral in 27 days for $3 million in Fayette County, TX. That's just drilling costs. Completion costs will likely double that number.
  • Commenced drilling of the first of two wells on the Arnim lease in Fayette County
  • Will add two rigs to average a total of 3-4 rigs in 2012 in the Eagle Ford
  • First three wells averaged 408 barrels of oil equivalent per day over the first 30 days from the Flatonia E Unit 1H, Flatonia E Unit 2H, and the Black Jack Springs #1H
  • A total of 25,000 net acres in the Eagle Ford
  • Austin Chalk potential in Fayette and Gonzales Counties. 1st well produced 402 boe/d in the first full month and the most recent well had a 30 ft gas flare and considerable oil shows. The well will be brought to production soon and another Chalk well is planned before year-end.

The Company recently successfully completed drilling its fourth Eagle Ford well, the Peebles #1H (39.8% W.I.) in its operated project area in Fayette County, Texas. This well was drilled to a measured depth of 15,100 feet, with a 5,000 foot lateral in 27 days at a cost of approximately $3.0 million. Through the application of optimal practices, GeoResources was able to significantly reduce the drilling time and cost of this well. The Company believes it can continue to realize improved drilling, completion and operational efficiencies which will positively impact costs in this area.

The Company is currently drilling the Arnim “A” #1H well (50.0% W.I.) with a second dedicated rig expected to begin drilling the Ring “A” 1H well (45.7% W.I.) within a couple of weeks, both of which are located in Fayette County, Texas. After drilling the Arnim “A” #1H, the rig will spud the Arnim “A” #2H (50.0% W.I.), which will be the second well in the Arnim “A” unit drilled from a common pad. These three wells will be completed along with the Peebles #1H well late in the fourth quarter with one frac crew working continuously to complete these wells in succession. After the Arnim “A” #2H, we expect to spud an additional one or two wells in our Eagle Ford project area by year end, which will bring our total 2011 Eagle Ford wells spud to eight or nine gross wells (3.8 to 4.3 net wells).

GeoResources currently plans to add two additional rigs to the Eagle Ford project area during 2012. Based on a three to four rig schedule the Company expects to spud between 21 and 24 gross wells in its Eagle Ford project area in 2012 (8.7 to 9.6 net wells).

GeoResources has continued to add leases to its Eagle Ford project area throughout 2011 and its current net acreage totals approximately 25,000.

In addition to the Eagle Ford, we believe our acreage in Gonzales and Fayette counties has Austin Chalk potential, which lies immediately above the Eagle Ford. A re-entry, located within the boundaries of our southern Fayette County acreage block, was completed in February 2011 by a third party operator. That well, the Cherry Oil Unit 1H, averaged 402 boe/d in the first full month of production after the re-entry and has cumulative production of over 46,000 BO and 41,000 Mcf. We are currently participating with that same operator in a Chalk well, located about three miles to the southwest, being the Tilicek #1H well, where we have a 14.1% W.I. The Tilicek well reached total measured depth of 13,529 on September 19, 2011 and should be on production very soon. This well had considerable oil shows during drilling and also had a 30’ gas flare. We currently have one additional Austin Chalk well planned for Fayette County in 2012; however, we may accelerate our Chalk drilling

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MHR - Oryx Hunter #1H - Sable Hunter #1H IP Rates

Magnum Hunter Resources (MHR) gave an operational update today on two recently completed wells. The companies acreage spans over 51,000 gross acres in Gonzales and Lavaca counties. The Oryx Hunter #1H and Sable Hunter #1H were brought to production at 2,044 and 1,017 boepd, respectively. Oil made up more than 90% of the production stream in both wells.  Magnum Hunter has a total of 198 possible drilling locations identified.

  • The Oryx Hunter #1H which was drilled to a measured depth of 16,955 feet (horizontal lateral length of 6,687 feet), fraced with 21 stages and placed on production September 18, 2011. The initial flowing production rate was 2,044 Boepd (1,944 Bopd, 600 Mcf & 0 Water) on a 16/64" choke with 1,650 psi FCP.
  • The Sable Hunter #1H was drilled to a measured depth of 15,728 feet (horizontal lateral length of 5,067 feet) fraced with 15 stages in early September and has posted a 24-hour IP rate of 1,017 Boepd (920 Bpds 581 Mcf & 0 Water) on a 16/64" choke with 1,900 psi FCP. This well went on production September 12, 2011.

"Over the last several weeks, our Eagle Ford Division has successfully put on production and into sales two extraordinary wells. The more experience we continue to obtain in this region is undoubtedly creating better production results. A combination of longer laterals, more frac stages, and certain modifications to downhole equipment has led to new well completions ranging from 1,000 - 2,000 Boepd per well. Our mineral lease acreage position is undoubtedly some of the best in the entire Eagle Ford Shale play when comparing rates of return on capital deployed due to our 90% oil component. We have plenty of running room for many years to come with 198 drilling locations currently identified across our 52,000 gross leasehold acreage positions. Our Company's in-house reservoir engineers have identified net unrisked resource potential of 39 Million Boe over this acreage position."