HOUSTON, Oct. 5, 2004 (PRIMEZONE) -- Capco Energy, Inc. (OTCBBCGYN) announces its operational results for the nine months ending September 30, 2004 (Phase 1) and forecasted capital spending for the period ending September 30, 2005 (Phase 2).
During the year 2004, Capco's activities consisted of three areas of business operations: (i) Gulf of Mexico Shelf (GOM), (ii) Domestic On Shore (DOS) and (iii) Non operated properties (NOP).
Summary results of each area are as follows:
GOM:
The Company has 58 wells and 21 platforms in this region and has interests in 13,000 acres of leasehold. The Company is also in negotiations to acquire additional properties in the region. The Company's working interest (WI) and net revenue interest varies from 65% to 100% and 52% to 83%, respectively. Prior to implementation of Phase 1, the Company was producing about 1.0 million cubic feet a day (mmcfd) to Capco's WI. Due to capital spending of about $2.0 million in Phase 1, Capco's WI share of production has increased to about 4.0 mmcfd and 65 bopd. The increases are due to extensive refurbishment of the two platforms in Brazos Block 440 and return to production of the following five wells:
Well No. Initial production Work performed 478L-2 2.5 mmcfd 18bopd New perforations 440L-A5 0.1 mmcfd Activated new zone 440L-N1 1.5 mmcfd Activated new zone 440L-NW1 0.3 mmcfd Reactivated after 10 years 440L-C3 0.5 mmcfd 70 bopd Surface equipment installation
For the period ending September 30, 2005, the Company has forecasted a capital spending of $7.5 million. The capital spending is primarily for the recompletions of existing zones including sidetracking of zones behind pipe but no drilling is included in these spendings.
DOS
The Company has 95 wells with about 6,500 acres of leasehold in this unit, all located in Texas and Oklahoma. The Company's working interest ranges from 50% to 92%. Prior to the implementation of the Phase 1 program, there was no production from the properties in this area of activity. The current production to Capco's WI is 30 bopd and 400 mcfd, all derived from the Caplen, Green Ranch prospects in Texas and Slick waterflood unit in Oklahoma. The Company projects a capital spending of $2.0 million to increase production levels by drilling five developmental wells, recompletion of certain non-producing wells and completion of the waterflood unit in Oklahoma.
NOP
The Company has varying interests in Montana, Alabama and Michigan, which produce a net of 1350 mcfd and 62 bopd. The Montana non-operated properties (Capco's working interest varies to as much as 4.34%) also include an interest in a gas plant, about 450 miles of gas pipelines and 1.2 million acres of undeveloped land holdings. Capco's non-operated interest in Michigan alone produces a net of 600 mcfd and 55 bopd to Capco's interest. In Alabama the Company has a 15% interest in about 7,100 acres in the Black Warrior basin. The Company has participated in the drilling of two wells to date. The first well was a dry hole and the second well is being drilled at the present time.
In summary the Company's current net production approximates 5.7 mmcfd and 157 bopd net to Capco's working interest and the Company is forecasting a capital spending of $9.5 million and an additional expenditure of $3.5 million for the acquisition of reserves for the GOM region. To date the Company has met its cash needs through cash flow, sale of non-core assets and equity funding and going forward will also look to arrange for bank financing.
Ilyas Chaudhary the CEO of Capco said, "We are very pleased with the results for our Phase One program which were forecasted prior to the implementation of the program and were timely completed. The Phase 1 results are expected to build the confidence level of the shareholders and the investment community to take further notice about Capco and its Phase Two plan which ends September 2005."
The information herein includes forward-looking statements based on assumptions that may prove not to have been accurate. The business activities of Capco Energy, as usual to its industry, are subject to many risks both calculable and incalculable. Included in these risks are oil and gas prices, the need to develop replacement reserves, the reliability of reserve estimates, and the feasibility of extracting reserves, environmental risks, drilling and operating risks, and the ability of the Company to implement its business strategy.
For further information please contact Brenda Ruark at 281 565 0424 or visit our website: www.capcoenergy.com