HOUSTON, July 8, 2005 (PRIMEZONE) -- Aztec Oil & Gas, Inc. (OTCBB:AZGS) announced today that according to Maverick Energy, operator of the Z2 LLC leases, fracing of the Upper B Zone of well 337 A was completed on July 6, 2005. Well 337 A is one of the four (4) new infield oil wells recently drilled under the Big Foot 2004-1 Drilling Program LP on the Z2 LLC properties (in which Aztec holds a 31.283% working interest).
According to Maverick Energy, the fracing on the 337 A well, which was successfully completed by oil services leader Halliburton, was very successful. Maverick indicates that they anticipate good oil production response from the B Zone in this well. The remaining three wells in this project are expected to also be fraced in the Upper B Zone within the next 3 weeks, subject to equipment availability and barring any technical delays or weather problems. These four (4) wells are the first wells funded in accord with Aztec's business model that calls for participation from outside investors to assume the cost of drilling wells in exchange for a part of the revenues derived from the wells they finance.
The fracing process is used to help open up pay zones holding petroleum and natural gas so that it can flow more freely from the formation into the bore hole that has been drilled. All four wells were drilled to an average depth of approximately 4,000 feet. The Upper B Zone is the main pay zone that was originally targeted for these four wells. The wells had been fraced earlier in the Lower D Pay Zone. Such Lower ("D") Zone fracing was exploratory in nature, while coming back "uphole" and fracing the B Zone was always contemplated for these wells. Only one of the four wells was found to have acceptable production in the Lower D Zone, according to Maverick Energy.
"Aztec is pleased that the fracing has now been completed on the 337 A well (the first of the four new wells to be fraced in the main pay zone). We are also encouraged that Maverick has indicated that 337 A should be a good producing oil well. We hope to get positive news on the other three new wells in the Big Foot Field from Maverick in the next few weeks," comments Dr. Kenneth Lehrer, Chief Financial Officer of Aztec Oil & Gas, Inc.
"We understand that it may appear that news on the completion of these four wells has been slow in coming. In that regard, we must point out that while Aztec holds a substantial 31.283% working interest in Z2 LLC, Maverick Energy and Z2 LLC's management control drilling and operations at the Z2 LLC properties, and as such Aztec has no direct control over the schedule that these and other wells on the leases are drilled, completed or worked over. We have confidence that Z2 LLC and Maverick, as the site operator, will complete work on each of these wells as quickly as possible given that the costs of the wells have long since been fully funded," adds Lehrer.
The Big Foot Drilling Program received funds from two investment groups affiliated with shareholders of Aztec to pay for the drilling and completion phases of the four new Big Foot wells. Accordingly, the investment groups will receive 75% of the working interest revenue from the wells until the costs are recovered. Thereafter, working interest revenues would be split 50/50 between the investor groups, on one hand, and Z2 LLC, with Aztec being entitled to the equivalent of 31.283% of the Z2 LLC working interest net.
In additional to the above referenced programs, Aztec also recently acquired minority interests in two Deep Lake well prospects in Cameron Parish, Louisiana. Drilling, logging, and casing of the first Deep Lake well (Well No. 2) have been completed to its target depth of 14,321 feet. The second Deep Lake well has now been drilled, cased and logged to its approximate target depth of 13,645 feet. Both wells are now awaiting a completion rig. The company has additionally taken a minority interest in a drilling project in the South Deep Lake field, also in Cameron Parish, Louisiana. That project involves an initial single well to be drilled to a target depth of over 19,000 feet. Aztec is also participating in a drilling program in the Barnett Shale play located in Cooke, Wise and Montague Counties, Texas; and two drilling projects in Wharton County, Texas. The company will additionally soon be announcing participation in multiple well programs in other states.
For more information on Aztec Oil & Gas, Inc., visit www.aztecoil-gas.com.
The statements contained in this news release that are not historical facts may be statements regarding the Company's future that involve risks and uncertainties which could cause actual results to differ materially from those currently anticipated. For example, statements that describe the Company's hopes, plans, objectives, goals, intentions or expectations are all forward looking statements. Any such statements made herein about the Company's future are only made as of the date of this news release. Numerous factors, many of which are beyond the Company's control, may affect actual results. Also, the price Aztec Oil & Gas, Inc. and the other parties involved in the Z2 properties receive for the oil produced on their properties may be less than quoted NYMEX prices at any given time. The Company undertakes no obligation to publicly update such forward looking statements to reflect subsequent events or circumstances.