HOUSTON, May 16, 2005 (PRIMEZONE) -- CAPCO Energy, Inc. ("CAPCO" or "The Company") (OTCBB:CGYN) today announces an update to its operations for year 2005, including the results of drilling the exploratory well at OCS Galveston Block 297. Capital expenditures for exploration and exploitation activities for the year 2005 will approximate $10 million. A portion of the required funding has already been raised. The Company plans to obtain the remaining funds through sale of equity, divestiture of non core assets and cash flow from properties. Following is an update on the Company's current operations:
A) Offshore
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a. Galveston Block 297. The Company drilled an exploratory well to
a depth of 13,500' and after review of the log data has decided
to plug and abandon the well. CAPCO had participated in this
prospect as the initial terms were very favorable and the
potential reserves, if the well had been successful, were in the
range of 100 bcf. The cost of drilling the well exceeded our
initial estimate due to unexpected subsurface conditions
encountered during the drilling of the well. CAPCO has filed for
insurance relief on certain of these expenditures.
b. Brazos Area. CAPCO has a total of 27 wells in this area of
which 5 are producing at current production levels of 4.2 mmcfd.
The Company has working interests ranging from 35% to 65% in
certain of the wells and a 65% working interest in the land
holding of approximately 13,000 acres. CAPCO plans to place
additional wells on production before the end of the year. The
Company has acquired the necessary workover equipment in order to
restore many of these wells to production without requiring third
party services.
c. Matagorda Island. CAPCO has a 100% working interest in 6 wells
in this area. The Company plans to place the wells on production
after certain lease issues have been perfected, and expects to
have placed 3 wells on production by the end of the third
quarter.
d. Chandeleur OCS Area/St. Bernard Parish. The Company has after
payout interests ranging from 30% to 66% in 11 producing wells.
Current production levels are approximately 13 mmcfd. Land
holdings are approximately 13,300 gross acres. The potential
exists to drill developmental wells in this area.
e. High Island 196. The Company has an after payout interest of
66% in 4 wells in this property that are currently producing at a
rate of approximately 2.2 mmcfd. The land holdings are
approximately 5,000 gross acres.
B) Onshore
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a. Caplen Field, Galveston County, Texas. CAPCO has a 61% working
interest in approximately 6,000 gross acres and 11 wells in this
property. Current production, after giving effect to a recently
tested well, is about 200 bopd from 2 wells. Additional work is
planned to reactivate the balance of the wells.
b. Slick Waterflood, Creek County, Oklahoma. The Company has a 45%
working interest in approximately 2,700 gross acres. Current
production from 11 wells approximates 30 bopd. There are a total
of 115 wells in the property and CAPCO plans to continue to place
additional wells on production for the balance of the year.
c. Bandwheel, Osage County, Oklahoma. The Company has a 100%
working interest in 1,300 gross acres of land with current
production levels of 26 bopd. There is a total of 120 wells on
the property and the Company plans to continue to place
additional wells on production for the balance of the year.
With the forecasted capital spending for the year 2005, CAPCO's expectations are to exit the year 2005 with gross production levels exceeding 25 mmcfd.
Management of the Company will discuss these operational updates in a conference call set for Tuesday, May 17, 2005 at 10 AM, EST. If you wish to attend the conference meeting, please call 888-867-5802, Confirmation No. 11742259.
Safe Harbor Statement under the Private Securities Litigation reform Act: The information herein contains forward-looking statements based on assumptions that may prove not to have been accurate. The business activities of CAPCO, 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. These and other risks are identified in our SEC filings and should be considered in evaluating the forward-looking statements made herein. These risks could cause actual financial results to vary from those anticipated.