ZaZa Energy Corp. (NASDAQ: ZAZA) announced Oct. 20 the one-year production results from three of its East Texas vertical wells in Madison and Walker counties, Texas.
With respect to its horizontal program, the Houston-based company said it is expecting completion procedures to be underway by the end of the month for the Josey Wales #1H, which targets a formation similar to the McAdams 1H, and is currently drilling the lateral portion of the Colburn #3H, which will be our first horizontal test of a deeper, known productive formation.
Vertical well results from October 2013-October 2014:
- Toby #1—During 336 producing days, average three-stream production for the Toby well was about 539 barrels of oil equivalent per day (boe/d), consisting of about 230 barrels per day (bbl/d) of liquids and 1,853 thousand cubic feet per day (Mcf/d) of natural gas (cumulative one-year production of roughly 181,069 boe);
- Grisham #1—During 358 producing days, average three-stream production for the Grisham well was about 533 boe/d, consisting of about 456 bbl/d of liquids and 460 Mcf/d of natural gas (cumulative one-year production of roughly 190,720 boe); and
- Laura Unit #1—During 356 producing days, average three-stream production for the Laura well was about 382 boe/d, consisting of about 293 bbl/d of liquids and 532 Mcf/d of natural gas (cumulative one-year production of roughly 135,911 boe).
ZaZa holds a 25% working interest in the Toby well and a 29.38% working interest in each of the Grisham and Laura wells.
President and CEO Todd A. Brooks said in a statement, “The one-year performance of these three vertical wells illustrates how ZaZa’s East Texas acreage can be developed using two alternative approaches: horizontal or vertical wells. The horizontal approach is exemplified by the results of two recent wells in southern Madison and northern Walker counties: (i) ZaZa’s McAdams Cattle Company #1H (929 boe/d IP-30) and (ii) nearby offset Vick B Unit #1H (2,311 boe/d IP-30). The vertical approach has been confirmed by the Toby, Grisham, and Laura well results.”
ZaZa’s internal models indicate similarly strong economics of greater than 50% initial rate of return for both horizontal and vertical wells, assuming horizontal well costs of about $9.5 million, vertical well costs of about $4.5 million, about $80 oil, and about $3.70 per million British thermal units of gas.
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