Published: August 18, 2010
Crimson Exploration, Inc. Announces Successful Drilling Results in San Augustine and Liberty Counties, Texas
HOUSTON - (BUSINESS WIRE) - In San Augustine County, Crimson Exploration Inc. (NasdaqGM:CXPO)
successfully completed its first operated well in the Bruin Prospect
Area. The Grizzly #1 (55% WI) was drilled to a measured depth of 18,100
feet with an approximate 4,200-foot horizontal lateral in the Mid
Bossier Shale and was completed with 14 frac stages. The Grizzly #1
continues to clean up and is currently producing at a gross restricted
rate of approximately 11.5 MMcfd on a 16/64" choke with around 9,100 psi
flowing casing pressure. In Liberty County, Crimson successfully
completed the Schwarz #2 (65% WI) in the Lower Cook Mountain sand at
approximately 15,100 feet. The well is producing at a gross rate of 5.4
MMcfd and 120 Bcpd on a 12/64" choke with flowing tubing pressure of
9,100 psi and has been flowing to sales for approximately one week. This
well follows our recently announced Catherine Henderson A-7 well (66%
WI) which has been producing since June at a rate of approximately 4.5
Mmcpd and 340 Bcpd. With the production additions from these two
important wells, Crimson's current daily net production has increased to
approximately 41 Mmcfepd.
Mr. Allan D. Keel, Crimson's President and CEO, stated, "With the
successful completion of the Grizzly #1 well, Crimson has validated the
reserve potential of the Mid Bossier Shale in its Bruin Prospect Area."
Mr. Keel went on to say "based on well performance, we could have flowed
the Grizzly well at significantly higher rates but have decided to use
industry-best practices for reservoir optimization to maximize ultimate
recovery." With respect to the recent successes in the Schwarz #2 and
Catherine Henderson A-7 wells, Mr. Keel said, "The successful execution
of our Liberty County drilling program continues to provide Crimson with
the production and cashflow base that allows us to continue our
Haynesville and Eagle Ford Shale development as well as pursue
additional growth opportunities within our deep inventory of lower risk,
high quality conventional prospects."
The 11.5 MMcfd test rate on the Grizzly well is reflective of Crimson's
strategy that restricting rate and pressure drawdown on Haynesville and
Mid Bossier Shale wells increases the Estimated Ultimate Recovery (EUR),
results in a shallower and more stable decline curve, and delays the
need for costly compression. Crimson adopted this strategy based on the
experience attained by other operators in this trend, core studies that
substantiate the loss of fracture conductivity at higher initial
drawdown rates, and service company studies that indicate potential
pinching off of available reservoir at higher production rates. Data
from wells produced at restricted rates in the trend suggest that
although this methodology provides lower production in the first few
months of flow, the cumulative production curve compared to higher rate
wells crosses in less than a year with the restricted rate wells flowing
at higher rates and pressures at the point they cross, substantiating
the belief that EUR is benefited at little to no loss of present value.
Since Crimson has chosen not to increase the rate on the Grizzly well
above its current level, the company is providing two graphs which
illustrate the performance and strength of this well to date.
Crimson now has three logged pilot holes in the Bruin Prospect area and
is extremely encouraged by their results. The Mid Bossier Shale and
Haynesville Shale gross thicknesses are approximately 300' and 160',
respectively, and have rock qualities similar to those seen in the
Haynesville Shale in the Louisiana Core area. The James Lime is similar
in quality and thickness to that being actively developed in the County
Line Field to the northwest.
Crimson currently continues to drill in the lateral section of the Gobi
#1 (70% WI) in the Bruin Prospect Area. Completion operations are
expected to begin in October. The Bengal #1 (37.5% WI), our first well
in Crimson's Tiger Prospect Area in Sabine County, is expected to spud
in early September. The Halbert Trust #1 (29% WI) in our Fairway Farms
Prospect Area in San Augustine County is expected to commence completion
operations in October.
In Bee County, Texas, the Windham #1 test (20% WI) of the Eagle Ford
Shale formation is currently drilling and is expected to be completed by
mid October.
In Liberty County, the Catherine Henderson A-8 (66% WI) well is nearing
its proposed total depth of 13,500 feet and appears successful based on
preliminary mud log analysis. Once drilling and completion operations
are finished, we anticipate first production by early September.
Crimson Exploration is a Houston, TX-based independent energy company
engaged in the acquisition, development, exploitation and production of
crude oil and natural gas, primarily in the onshore Gulf Coast regions
of the United States. The Company owns and operates conventional
properties in Texas, Louisiana, Colorado and Mississippi, approximately
12,000 net acres in the highly prospective Haynesville Shale,
Mid-Bossier, and James Lime plays in San Augustine and Sabine counties
in East Texas, approximately 8,800 net acres in the prospective Eagle
Ford play in South Texas and approximately 11,000 net acres in the
Denver Julesburg Basin of Colorado.
Additional information on Crimson Exploration Inc. is available on the
Company's website at http://crimsonexploration.com.
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. Initial production
rates stated in this release are expected to differ substantially from
longer term average production rates. Forward looking estimates
of production growth assume drilling results comparable to recent prior
periods, which may not be realized. Please refer to our filings
with the SEC, including our Form 10-K for the year ended December 31,
2009, for a further discussion of these risks.
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Crimson Exploration Inc., Houston, TX
E. Joseph Grady, 713-236-7400
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