ZaZa Energy Corporation (NASDAQ:ZAZA) recently exploded to $5 per share after the Company’s beat expectations on 3rd quarter operating results.
ZAZA reported revenues of $2.7 million, as compared to $1.1 million for the comparable 2013 period, an increase of approximately 144%. Operating costs and expenses for the third quarter ended September 30, 2014 were $6.3 million as compared to $15.2 million in the same 2013 period.
ZaZa Energy Corporation (NASDAQ:ZAZA) is an independent exploration and production company that has established its position as an industry leader in both conventional and unconventional resource plays.
The Company has a long history of finding potential interests; back in 2010 the Company drilled 11 successful proof-of-concept wells and 19 appraisal wells in northern, central, and southern LaSalle County. ZAZA also drilled a proof-of-concept well in the eastern Gonzales County in 2011 which, incidentally, has an estimated ultimate recovery of 5,00,000 barrels of oil equivalent per day.
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The coming months could be big for ZAZA considering that both joint ventures are set to enter the appraisal and development phases. With both vertical and horizontal wells scheduled to be spud soon, the company has an impressive drilling inventory lined up.
last year ZAZA sold its Non-Core Moulton Eagle Ford Assets for an approximate sum of $38 million. The strategic divestment enhanced ZAZA’s financial stability alongside providing it with enough liquidity to discharge its senior secured creditors, and reduce its liabilities by $73 million.
On October 20 ZAZA announced the one-year production results (October 1, 2013 to September 30, 2014) from three of its East Texas vertical wells in Madison and Walker counties, Texas:
Toby #1 (“Toby”). During 336 producing days, average three-stream production for the Toby well was approximately 539 boe/d, consisting of about 230 b/d of liquids and 1,853 mcf/d of natural gas (cumulative one-year production of ~181,069 boe).
Grisham #1 (“Grisham”). During 358 producing days, average three-stream production for the Grisham well was approximately 533 boe/d, consisting of about 456 b/d of liquids and 460 mcf/d of natural gas (cumulative one-year production of ~190,720 boe).
Laura Unit #1 (“Laura”). During 356 producing days, average three-stream production for the Laura well was approximately 382 boe/d, consisting of about 293 b/d of liquids and 532 mcf/d of natural gas (cumulative one-year production of ~135,911 boe).
ZaZa holds a 25% working interest in the Toby well and a 29.38% working interest in each of the Grisham and Laura wells.
CEO of ZAZA Todd A. Brooks stated, “The one-year performance of these three vertical wells illustrates how ZaZa’s East Texas acreage can be developed using two alternative approaches: horizontal or vertical wells. The horizontal approach is exemplified by the results of two recent wells in southern Madison and northern Walker counties: (i) ZaZa’s McAdams Cattle Company #1H (929 boe/d IP-30) and (ii) nearby offset Vick B Unit #1H (2,311 boe/d IP-30). The vertical approach has been confirmed by the Toby, Grisham, and Laura well results.”
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Conclusion: ZAZA is making a highly explosive move up on positive production results from Three East Texas Vertical Wells after hitting a recent low of $1.66. This is very significant news and gives merit to the turnaround story many are predicting here.
ZAZA hit $5 per share after the Company’s beat expectations on 3rd quarter operating results.The stock has a lot going for it here including a cleaned up balance sheet, Strategic divestment of the non-core Moulton Eagle Ford assets for $38 million, very impressive well economics, highly experienced management team and a significant acreage with a high concentration of liquid rich assets. ZAZA should be on every speculators watch list here.
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Disclosure: we hold no position in ZAZA either long or short and we have not been compensated for this article.