ZaZa Energy Announces McAdams Well 30-Day Initial Production Results Company Working Through Term Sheets for New Reserve Based Debt Facility
ZaZa Energy Corporation (“ZaZa” or the “Company”) (NASDAQ:ZAZA) today announced the 30-Day production results from its East Texas McAdams Cattle Company 1H horizontal well (“McAdams 1H”) in Walker County, Texas.
Over the first 30 active days of production, average three-stream production for the McAdams 1H was approximately 929 boe/d, consisting of about 529 b/d of liquids and 2,400 mcf/d of natural gas. Currently, the well is only producing from the 16 deepest stages (approximately 3,300 feet) of the lateral. Stages 17-23 remain closed while the operator conducts additional production testing. Water production over the first 30 days averaged approximately 2,379 b/d, with 29% of the hydraulic fracturing load water recovered at the end of the period. Given the nature of the carbonate formation in which the McAdams 1H is completed, ZaZa expects to recover and produce almost all of the load water injected during fracturing.
ZaZa also is working through term sheets to execute a new reserve based debt facility, which the Company will use to immediately take out its existing Senior Secured Notes. Remaining availability will be used to fund JV capital expenditures. The facility is not expected to contain any dilution or equity component. ZaZa plans to close on this facility before the end of the year.
President and CEO Todd A. Brooks stated, “The Company has three active well operations in East Texas. On the McAdams 1H, about one-third of the lateral is closed while we analyze relative contribution results along the 16 stages currently open. We are in the process of completing the Josey Wales 1H lateral well, which targets a formation similar to the McAdams 1H. Lastly, the Company is about two-thirds of the way through the drilling of the Colburn 3H, which will be our first lateral test of a deeper, known productive formation in the area.”
All of the aforementioned wells are operated by EOG Resources, Inc., with ZaZa holding a 25% working interest.
About ZaZa Energy Corporation
Headquartered in Houston, Texas, ZaZa Energy Corporation is a publicly-traded exploration and production company with primary assets in the Eagle Ford and Eagle Ford East resource plays in Texas. More information about the Company may be found at www.zazaenergy.com.
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, including without limitation, statements and projections regarding the Company’s future financial position, operations, performance, business strategy, returns, budgets, reserves, levels of production and costs, ability to raise additional capital or refinance indebtedness, statements regarding future commodity prices and statements regarding the plans and objectives of the Company’s management for future operations, are forward-looking statements. The Company’s forward looking statements are typically preceded by, followed by or include words such as “will,” “may,” “could,” “would,” “should,” “likely,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “goal,” “project,” “plan,” “intend” and similar words or expressions. The Company’s forward-looking statements are not guarantees of future performance and are only predictions and statements of the Company’s beliefs based on assumptions that may prove to be inaccurate. Forward-looking statements involve known, unknown or currently unforeseen risks and uncertainties that may be outside of the Company’s control and may cause the Company’s actual results and future developments to differ materially from those projected in, and contemplated by, such forward-looking statements. Risks, uncertainties and other factors that could cause the Company’s actual results to materially differ from the expectations reflected in the Company’s forward-looking statements include, without limitation, our former registered public accounting firm has expressed doubt about our ability to continue as a going concern; fluctuations in the prices for, and demand for, oil, natural gas and natural gas liquids; our substantial level of indebtedness; risks associated with whether and when the reserve based debt facility will be finalized and on what terms; problems with our joint ventures or joint venture partners; our ability to raise necessary capital in the future; exploratory risks associated with new or emerging oil and gas formations; risks associated with drilling and operating wells; inaccuracies and limitations inherent in estimates of oil and gas reserves; our ability to replace oil and gas reserves and any other factors or risks listed in the reports and other filings that the Company has filed and may file with the Securities and Exchange Commission. Any forward-looking statements made by the Company in this presentation and in other written and oral statements are based only on information currently available to the Company and speak only as of the date on which they are made. The Company undertakes no obligation to update or revise any of its forward-looking statements, whether as a result of new information, future developments or otherwise.
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