HOUSTON--(BUSINESS WIRE)--Oct. 31, 2012--
Crimson Exploration Inc. (NasdaqGM: CXPO) provides an operational update
for recent activity.
Highlights Include:
-
Covington-Upchurch #1H produced at a gross 24-hr rate of 6.9
Mmcfepd, through the toe of the well only
-
Catherine Henderson #A-6 has been restored to a restricted gross
production rate of 7.2 Mmcfepd
-
Third quarter production of 3.6 Bcfe, or 38,759 Mcfepd, in line
with management’s guidance
-
Third quarter crude oil and liquids production exceeds production
ratio greater than 50 percent
Woodbine Formation - Grimes County, Texas
In Grimes County, TX, the Covington-Upchurch #1H well (67.8% WI),
targeting the Woodbine formation, has been drilled to a total measured
depth of 15,228 feet, including a 5,190 foot lateral. In preparation for
completion operations, Crimson perforated only the toe stage of the
lateral section which, during a 24-hr period, produced naturally (i.e.
without fracture stimulation) at a rate of approximately 6.9 Mmcfepd, or
179 barrels of condensate, 205 barrels of natural gas liquids and 4.6
Mmcf of natural gas. The well has yet to be fracture stimulated and the
above rate represents production from only one of the fifteen (14 + toe)
planned perforation stages. The production rate for the well is
anticipated to improve upon conducting fracture stimulation operations
along the entire lateral; however, it is not possible to estimate at
this time what total production rate will be achieved from the full
lateral section.
At present, gas pipeline and liquids extraction infrastructure in the
Grimes County area is not sufficient to take the full gas volumes from
this well. It is anticipated that additional capacity will be developed
in the area by year-end. Full fracture stimulation operations on this
well are currently ongoing and are expected to be complete in mid-late
November with a full wellbore flow test to follow.
In Madison County, TX, the previously reported Payne #1H well (92.1%
WI), which was completed in the Woodbine formation and placed online on
July 21, 2012, has averaged in its first 100 days approximately 1,014
Boepd and has cumulatively produced approximately 101,430 Boe. At the
time of announcement the well had only ten days of production history.
Allan D. Keel, President and Chief Executive Officer, commented,
“Crimson is extremely encouraged by the sustained high production rate
in the Payne #1H in our Force Area of Madison County and the initial
flowback in the Covington-Upchurch #1H from only a single non-stimulated
stage of the lateral, indicating a strong economic well. The
Covington-Upchurch well is valuable in de-risking our Iola-Grimes
acreage position in Grimes County, TX where we have approximately 7,650
net acres. As previously disclosed, we expect delivery, in early
December, of the rig we will use for a continuous drilling program in
Madison and Grimes counties during 2013.”
Liberty County, Texas
In Liberty County, TX, the Catherine Henderson #A-6 well (60.8% WI) was
successfully sidetracked and brought back on line at a restricted gross
initial production rate of 7.2 Mmcfepd, or 262 barrels of oil
condensate, 307 barrels of natural gas liquids and 3.8 Mmcf of natural
gas, on a 16/64th choke with 3,298 psi of flowing tubing
pressure.
As previously disclosed, the original well was lost due to mechanical
problems in January 2012 and was a significant contributor to Crimson’s
conventional production base. Production has now been restored to near
pre-workover levels as the well continues to clean up. Bottom hole
pressure measurements confirm that the well has significant proved
reserves remaining.
Third Quarter Production Results
Production for the third quarter of 2012 was approximately 3.6 Bcfe, or
38,759 Mcfe per day, achieving the mid-point of our stated production
guidance range of 37,000 – 40,000 Mcfe per day. Crude oil and natural
gas liquids production ratio was 50.4% for the third quarter, up from
46% in the second quarter of 2012, and up from 29% in the prior year
quarter. This marks the first quarter Crimson’s crude oil and natural
gas liquids production has exceeded a ratio greater than 50 percent.
Since 2011, Crimson has achieved its stated goal of a balanced
production profile by targeting its extensive liquids-rich inventory of
projects in the East Texas Woodbine formation and the South Texas Eagle
Ford Shale. That ratio should continue to increase due to Crimson’s
liquids focused drilling program planned for 2013.
Crimson Exploration is a Houston, TX-based independent energy company
engaged in the acquisition, development, exploitation and production of
crude oil and natural gas, primarily in the onshore Gulf Coast regions
of the United States. The Company owns and operates conventional
properties in Texas, Louisiana, Colorado and Mississippi, including
approximately 18,500 net acres in Madison and Grimes counties in
Southeast Texas, approximately 8,200 net acres in the Eagle Ford Shale
in South Texas, approximately 11,000 net acres in the Denver Julesburg
Basin of Colorado, and approximately 5,700 net acres in the Haynesville
Shale, Mid-Bossier, and James Lime plays in San Augustine and Sabine
counties in East Texas.
Additional information on Crimson Exploration Inc. is available on the
Company's website at http://crimsonexploration.com.
This press release includes “forward-looking statements” as defined
by the Securities and Exchange Commission (“SEC”) and applicable
securities laws. Such statements include those concerning Crimson’s
strategic plans, expectations and objectives for future operations. All
statements included in this press release that address activities,
events or developments that Crimson expects, believes or anticipates
will or may occur in the future are forward-looking statements. These
statements are based on certain assumptions Crimson made based on its
experience and perception of historical trends, current conditions,
expected future developments and other factors it believes are
appropriate under the circumstances. Such statements are subject to a
number of assumptions, risks and uncertainties, many of which are beyond
Crimson’s control. Statements regarding future production, revenue, cash
flow operating results, leverage, drilling rigs operating,
drilling locations, funding, derivative transactions, pricing, operating
costs and capital spending, tax rates, and descriptions of our
development plans are subject to all of the risks and uncertainties
normally incident to the exploration for and development and production
of oil and gas. These risks include, but are not limited to, commodity
price changes, inflation or lack of availability of goods and services,
environmental risks, the proximity to and capacity of transportation
facilities, the timing of planned capital expenditures, uncertainties in
estimating reserves and forecasting production results, operating and
drilling risks, regulatory changes and the potential lack of capital
resources. All forward-looking statements are based on our forecasts for
our existing operations and do not include the potential impact of any
future acquisitions. Investors are cautioned that any such
statements are not guarantees of future performance and that actual
results or developments may differ materially from those projected in
the forward-looking statements. Please refer to our filings with the
SEC, including our Form 10-K for the year ended December 31, 2011, and
subsequent filings for a further discussion of these risks. Existing and
prospective investors are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date hereof. We
undertake no obligation to publicly update or revise any forward-looking
statements after the date they are made, whether as a result of new
information, future events or otherwise.
Source: Crimson Exploration Inc.
Crimson Exploration Inc.
E. Joseph Grady, 713-236-7400
Senior
Vice President and Chief Financial Officer
or
Josh
Wannarka, 713-236-7400
Manager of Investor Relations and FP&A
