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| Costilla Continues to Score South Texas Drilling Successes; Newest Southwest Speaks Well Tests With Potential of 25 MMCFD; Company Initiates Sealy Project With Frio Discovery |
MIDLAND, Texas, Jan. 7 /PRNewswire/ -- Costilla Energy, Inc. (Nasdaq: COSE) announced today that its Garland Walker #1 well -- drilled to a newly discovered fault block in the prolific Southwest Speaks field -- tested with a calculated absolute open flow (AOF) rate of approximately 25 million cubic feet of natural gas per day (MMCFD). The Walker is producing from a depth of approximately 15,000 feet at the initial rate of Five MMCFD, with 9,650 pounds of flowing tubing pressure on a 10/64-inch choke in the gas-rich Southwest Speaks property in Lavaca County, Texas. Costilla owns a 100 percent working interest, 75 percent net revenue interest in the Walker well. The Migl-Mitchell #5, an offset to the Migl-Mitchell #1, the company's biggest discovery, is being fractured for preparation to commence production. Costilla has identified eight additional drilling locations on its Speaks property. "With each new well in our South Texas drilling program, we are expanding our inventory of potential locations," said Mike Grella, president and chief executive officer of Costilla. "The Speaks field in particular is one we believe holds considerable opportunity of growth for Costilla." Costilla also reported that it has made a Frio discovery with the first successful well in its recently initiated Sealy exploration project in Austin County, Texas. The Bollinger GU#1 tested with a calculated AOF rate of 10 MMCFD, and expected to initially produce at the rate of approximately One MMCFD from a depth of approximately 3,600 feet. Based on the company's ongoing analysis of 55 square miles of 3-D seismic data, several additional locations have been identified for drilling to Frio, Yegua and Wilcox zones on the prospect. Costilla owns an interest in 7,500 net acres in the Sealy field, with a 100 percent working interest, 83 percent net revenue interest. "We are extremely excited about the initiation of our Sealy project which is an extension of our Gulf Coast exploration strategy," Grella said. "As we continue our focus on gas drilling, we believe the Sealy project holds significant economic potential going forward." Costilla Energy, Inc. is an independent energy company actively engaged in the exploration, acquisition and development of oil and gas properties, with operations primarily in the Permian Basin of Texas and New Mexico, South and East Texas, and the Rocky Mountain regions. Headquartered in Midland, Texas, the Company and its predecessors have been in business since 1988. The Company's common stock is traded on the Nasdaq National Market under the symbol COSE. Additional information about Costilla is available on the Internet at http://www.costillaenergy.com. Certain statements in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of Costilla Energy, Inc. to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: the volatility of oil and gas prices; the Company's ability to replace its oil and gas reserves; the availability of capital resources; the reliance upon estimates of proved reserves; operating hazards and uninsured risks; competition; government regulation; and the ability of the Company to implement its business strategy. Additional information is available in the Company's filings with the Securities and Exchange Commission, which are incorporated by this reference as though fully set forth herein.SOURCE Costilla Energy, Inc.
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800-758-5804, ext. 126873
CONTACT:
Mike Grella, President & Chief Executive
Officer, 915-683-3092, or Guy McCrary, Manager, Investor
Relations, both of Costilla Energy, Inc.
