ZaZa Energy Corp. detailed a reserves and operations update for the Eagle Ford East, where it has about 140,000 gross (35,000 net) acres within an area of mutual interest with EOG Resources Inc. (EOG), Zaza said July 1.
Under the East Texas joint operating agreement with EOG, ZaZa now has the right to propose new development wells in specific locations and maintain its desired minimum drilling pace. In Walker and Grimes counties, ZaZa proposed two new authority for expenditures for Buda-Rose vertical wells.
Butch-T #1 and Chocolate-7 #1 are part of the 2H 2015 eight-well vertical development program. They will each cost about $3 million and deliver internal rates of return at about 40%. Production results will be similar to those achieved by the Toby #1V, the Grisham #1V and Laura Unit #1V. Respectively, these produced about 181,069 barrels of oil equivalent (boe); about 190,720boe; and about135,911boe in one year, the company added.
Butch-T #1 will be the first well spudded, in July. It is in northwest Walker County. The location was completed, the well was permitted, and the drilling contractor was identified. The well is expected to spud in July 2015.
Chocolate-7 #1, in northeast Grimes County, will be the second spudded, in the third quarter of this year. The location was surveyed and stacked and the application to drill was submitted and is pending approval.
Zaza also said it is progressing on three workovers in Walker County. The Josey Wales #1HR in the Buda will be be refracked. Drill plugs will cover the Eagle Ford, Buda and Glen Rose plays in the Josey Wales #1, and the True Grit #1 will be rod-pumped to test the Woodbine. These workovers will begin in July, the company added.
Proved reserves increased 487% on July 1, to 5.9MMboe up from 1MMboe on Dec. 31, 2014. On July 1, 60% of the reserves were liquids-weighted and 83% were proved undeveloped, ZaZa said. Proved developed reserves increased to 1MMboe, 46% higher than 0.7MMboe on Dec. 31, 2014.
The mid-year reserve report identified 6.8MMboe of probable reserves and 8.7MMboe possible reserves, for total 3P reserves of 21.5MMboe in Walker, Madison and Grimes counties.
Reservoir engineering firm Cawley, Gillespie & Associates Inc. prepared the estimated probable and possible reserves.
ZaZa Energy Corp. is based in Houston.
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