Caza is pleased to announce the successful sale of the San Jacinto property, which includes the Caza Elkins 3401 and 3402 wells. Management decided to divest the property in order to take advantage of attractive Wolfberry property sale prices and enable the Company to participate in more favorable investment opportunities. The Company was able to realize a fair price at Oil & Gas Asset Clearinghouse Auction, and the disposal will complete on or before July 31, 2012. The price received was $6.1MM and exceeded Caza's internal matrix for return on investment and capital employment.
The Company had an 85% working interest in the Caza Elkins 3401 well with a 63.75% net revenue interest. In all subsequent wells on the San Jacinto property, including the Caza Elkins 3402 well and the remainder of the leases, Caza had a 75% working interest and a 56.25% net revenue interest. The property is producing approximately 120 Boe per day net to the Company. The Company's reserve report prepared by Netherland, Sewell & Associates, Inc. dated December 31, 2011, gave the property proved reserves of 4.09 billion cubic feet of natural gas equivalent (Bcfe) and proved plus probable reserves of 5.26 Bcfe net to Caza.
W. Michael Ford, Chief Executive Officer commented: " We are also very pleased with the sale of the San Jacinto property. This sale has permitted Caza to realize the increased value created at San Jacinto, which will be utilized in more favorable investment opportunities".