ZaZa Energy Corp. said Tuesday it has hit a snag with its Stingray well in the Eaglebine play that will limit initial production. However, the setback is temporary, and the company intends to continue Eaglebine drilling while it high grades its Eagle Ford acreage.
ZaZa owns and operates 88,000 net acres in the Eaglebine, in the “highly organic and thickest area of the basin,” the company said. It began development in the Lower Eaglebine and is exploring development scenarios for its Upper Eaglebine resource.
Additionally, the Lower Cretaceous section sits below the Upper and Lower Eaglebine targets and has a gross thickness of about 1,300 feet on the ZaZa acreage, the company said. It said it will spud its first Lower Cretaceous vertical test this month as it evaluates the potential for producing multiple Lower Cretaceous targets in a vertical, commingled development strategy.
“We remain firm believers in our first-mover advantage and the enormous potential our company has today, given the resources we believe are prevalent in both our Eaglebine and our Lower Cretaceous position in Walker and Grimes counties, in addition to our proven Eagle Ford acreage,” said CEO Todd Brooks. “By divesting noncore assets, we continue to generate capital that places us in a stronger position to further delineate our Eagle Ford and Eaglebine projects, while enabling us to successfully pay down our debt.”
The company recently completed drilling and casing on its Eaglebine Stingray A-1H well in Walker County, TX (see Shale Daily, Nov. 7).
ZaZa previously said it would begin production from the Stingray in early December. That is still on track, but a restriction during the completion process will, in the near term, limit the production from the Stingray, ZaZa said. Despite the limit to production and in order to satisfy contractual obligations to Range Texas Production LLC, ZaZa said it intends to produce the Stingray A-1H well and initiate sales by Dec. 16, or later if Range agrees. After initiating sales and satisfying its obligation to Range, ZaZa said it intends to temporarily shut in the Stingray in order to remedy the restriction and establish initial full production rates.
In the Eagle Ford Shale, ZaZa said it intends to divest during the first quarter two of the prospects it considers noncore (the Dilley Prospect, about 2,000 net acres and the Hackberry/Oakland Prospect, about 23,000 net acres). The company expects to have about 47,000 net acres in the Eagle Ford post-divestiture.
ZaZa recently reached total depth in its Boening A-1H well in DeWitt County, TX, and is running production casing and preparing for completion. Once released from the Boening, the company will then move the Nabors Drilling USA rig, currently under a multi-well contract with ZaZa, back to its Eaglebine acreage in Walker County to drill the Commodore A-1 well to test the Lower Cretaceous zone.
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