2008-08-12 23:41:02 -
- Crimson Exploration Inc. (OTCBB:CXPO) today provided an operational update on production and drilling activity through the second quarter 2008.
Production Update
Crimson reported production of an estimated 4.8 Bcfe of natural gas equivalents, or approximately 53,200 Mcfe per day, for the second quarter of 2008, an increase of approximately 52% over the approximate 3.2 Bcfe, or 34,900 Mcfe per day, produced during the second quarter of 2007. The dramatic increase in production was primarily attributable to a full quarter of production in 2008 from the South Texas and Gulf Coast producing assets acquired from EXCO Resources, Inc. in May 2007, new production from the producing properties acquired from Smith Production at the end of May 2008 and
new production added at various points during 2007 and 2008 resulting from the success of our drilling programs. As of the end of July, we were producing approximately 61,500 Mcfe per day, with the recent increase in production resulting from the properties acquired from Smith (beginning May 31, 2008), the previously announced initiation of production from the Catherine Henderson #6 well in our Willis Marsh Field in Liberty County in mid June and the commencement of production from the recently drilled Henderson #7 well, also in Liberty County, at the end of July.
Drilling Activity
Liberty County, Texas - Felicia
Building upon the success we have had in this area since we acquired it in May 2007, we have drilled three more exploitation wells in this county since the first quarter, all of which were successful. We have now drilled a total of ten exploitation wells in this area since its acquisition, nine of which have been successful. Successes subsequent to the first quarter were the previously announced Catherine Henderson #6 well in the Cook Mountain formation in the Willis Marsh Field, which commenced production in late June at an initial gross rate of approximately 13,900 Mcfe/day (7,025 Mcfe/day, net to our interest). In July 2008, we also completed the Henderson #7 (73.3% WI) exploitation well in the Felicia Central area of the county, an 11,300 foot test of the Yegua EY1 and EY2 sands and commenced production in July at an initial gross rate of 10,000 Mcfe/day (6,300 Mcfe/day, net). We have logged an apparent success, and are preparing to complete the Henderson #8 exploitation well (73.3% WI) in the Yegua EY2 sand at 11,600 feet. We will continue to be active in the Liberty County area for the remainder of this year and 2009, with an estimated two to four more exploitation wells and one development well anticipated for the remainder of the year.
Lavaca County, Texas - SW Speaks
We recently completed the Migl-Quinn #9 well, our first operated well in the SW Speaks Field (34.4% WI). This development well was drilled to a total depth of 15,000 feet, was completed in the Magnolia sand and commenced production in mid-July at a gross rate of 2,100 Mcfe/day. We are currently drilling the Pilgreen #15 exploitation well (36.7% WI) in this field, targeting the Wilcox, and are at 11,200 feet toward a 14,500 foot objective. We anticipate drilling one more development well in this area during 2008.
Brooks County, Texas - Cage Ranch
The Cage Estate #G-4 development well (55.3% WI) was drilled and completed in the 8,700 foot sand and commenced production in June at a gross rate of 2,100 Mcfe/day. The G-4 is the first of a four well drilling program (two development wells and two exploitation wells) planned in this field for 2008.
This press release includes "forward-looking statements" as defined by the Securities and Exchange Commission ("SEC"). 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 and cash flow 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, drilling risks and regulatory changes and the potential lack of capital resources. 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, 2007 for a further discussion of these risks.
Crimson Exploration Inc., Houston
E. Joseph Grady, 713-236-7400
