US focused oil and gas company Caza (LON:CAZA) announced this morning that its Marian Baker #1 well on the Arran prospect in Acadia Parish, Louisiana, was set to be plugged and abandoned after failing to discover commercial levels of hydrocarbons. The well was drilled to a total depth of 15,462 feet and although several sand sections exist throughout the wellbore, the log data indicates that the targeted Middle Frio section between 12,500-15,462 feet has extremely low porosity and permeability. Caza said the shallower sands in the Upper Frio sections between 9,600-12,200 feet, which produce in the immediate area from the Midland Field, appeared to be wet at this location. However, based on log data, the company said it had reason to evaluate these shallower sands for additional potential across its current acreage block. The Caza Oil & Gas share price fell by 31% to 36.62p on the news.

Caza had a 25% working interest before casing point in the Marian Baker #1 well, which was drilled on time and within the estimated dry hole costs. Following its release of year-end reporting documents later this week, Caza said it would be making further operational announcements in the near future regarding plans for its other projects including: Bongo/O.B. Ranch development, Windham Wolfberry development and additional exploratory projects, including updates on its future south Louisiana projects such as Tiree and Lewis.

Mike Ford, Caza’s chief executive, said: “Although results on the Marian Baker #1 well are disappointing, it is important to note that because very little subsurface data exists in this area at these depths, Caza expects that the data collected while drilling the well will be valuable as we define additional high-value exploration prospects in this area. Additionally, the company will continue using a significant portion of the funds from the equity raise in November 2010 on development and exploratory drilling in 2011. Our cash reserves should have the company well placed to execute a strategy of revenue and reserve growth throughout 2011.”

The Marian Baker #1 well was the initial test well on Arran, which Caza had regarded as one of the most significant of a new wave of prospects that have been identified during re-analysis of its vast 3D seismic data banks. In an interview with Stockopedia in October, Caza’s chairman, John McGoldrick, said the company had estimated something…

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