ZaZa Energy Corp. (NASDAQ: ZAZA) announced Feb. 25 production results from horizontal wells in East Texas and a proposal of two new Buda-Rose vertical wells.
Colburn #3H Well Results
The Colburn #3H has achieved 24-hour peak production of about 808 barrels of oil equivalent per day (boe/d) with NGL in the Lower Glen Rose "G" Formation. Production included 70 barrels of per day (bbl/d) of 53 API oil, 2,860 thousand cubic feet per day (Mcf/d) of natural gas and 262 bbl/d of NGL.
Over the first 30 days of production, average three-stream production for the Colburn #3H was about 585 boe/d, consisting of about 250 bbl/d of liquids and 2,021 Mcf/d of natural gas.
It is currently producing on a 54/64 choke. Natural gas production has been flowing to sales via pipeline since Jan. 1, and NGL amounts are estimated based on 1,208 million British thermal units (MMBtu) of gas.
The well is flowing up casing, and the company said it expects production to improve upon installing tubing to achieve the velocity needed to lift the fluids.
During completion operations on the Colburn #3H, its 4,960-foot horizontal lateral was fracture stimulated in 26 separate stages with a moderate sized frack including 1,296 pounds of sand per foot of lateral. ZaZa said it will be proposing higher sand volumes per foot to improve production on future wells. To date 40% of the frack load has been recovered.
The Colburn #3H is the company's first proof of concept horizontal test of the deep Lower Cretaceous Glen Rose "G" Formation in East Texas, said Todd A. Brooks, ZaZa president and CEO, in a statement.
"The Lower Glen Rose Formation is present on all of the company's East Texas leases, and we are pleased this deeper formation is producing oil and rich gas as opposed to dry gas," Brooks said.
He said the Colburn #3H results demonstrate the formation's productive potential throughout ZaZa's 147,000 acre joint venture (JV) with EOG Resources Inc. (NYSE: EOG).
The Colburn #3H is operated by EOG, with ZaZa holding a 25% working interest.
Buda-Rose Drilling Program
Pursuant to the terms of ZaZa's East Texas JV with EOG, the company said it now has the right to propose new development wells in specific locations and maintain its desired minimum drilling pace.
Following its technical evaluation and an internal acreage high-grading campaign focused on vertical commingled development (Buda-Rose "stack and fracks"), the company has identified more than 800 well locations on the basis of 80-acre spacing.
ZaZa said it has proposed the following two new AFEs for Buda-Rose vertical wells to be located in Madison and Walker Counties:
- Carolina Reaper #1V; and
- Tigerpaw #1V.
Each well is estimated to cost about $3.5 million and deliver an internal rate of return of about 30% at current commodity prices.
ZaZa said it expects the production results of the new wells to be similar to those achieved by the company's previous Toby #1V (cumulative one-year production of about 181,069 boe), Grisham #1V (cumulative one-year production of about 190,720 boe) and Laura Unit #1V (cumulative one-year production of about 135,911 boe) wells.
"In a lower priced commodity environment, our strategy is focused on drilling de-risked, highly-economic Buda-Rose vertical stack and frack wells that will generate solid economic returns, continue to HBP our large acreage position, and increase our production and reserv," Brooks said.
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