CROSS BORDER RESOURCES ANNOUNCES FINANCIAL RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2012 AND PROVIDES OPERATIONAL UPDATE
DALLAS, TX -- Cross Border Resources, Inc. (XBOR.OB) (the “Company” or "Cross Border"), a Dallas-based oil and gas exploration and production company, recently filed its financial results for the quarter ended September 30, 2012. Additionally, the Company today is providing an update on its current operations.
Cross Border recognized $2,811,224 in revenues from sales of oil and natural gas for the three months ended September 30, 2012 (the “2012 Quarter”), compared to $1,900,393 for the three months ended September 30, 2011. This increase in oil and gas sales revenue is due primarily to increased production from wells added period over period.
Overall, the Company recognized $10,565,094 in revenues from sales of oil and natural gas for the nine months ended September 30, 2012, compared to $4,997,213 for the nine months ended September 30, 2011.
Operating expenses also increased during the 2012 Quarter and for the nine months ended September 30, 2012, due to more producing wells and workover expenditures, an increase in production taxes, and depletion directly resulting from an increase in production.
“We are excited with the results of the quarter ended September 30, 2012, and continue to see year over year growth. The decrease in production of approximately 11 BOEPD in the 2012 Quarter versus the quarter ended June 30, 2012, was due to the Tom Tom/Tomahawk field being offline beginning in mid-August for the repair of three saltwater disposal wells, sale of the Wolfberry assets to Big Star Oil & Gas, Inc., and the natural decline of the existing wells. The Tom Tom/Tomahawk field is back online and new wells are beginning to come online. We believe the reinvestment of the Wolfberry sale proceeds, the restart of the Tom Tom/Tomahawk field, and continued development will improve production going forward,” said Alan Barksdale, Chairman of Cross Border’s Board of Directors.
The entire Quarterly Report on Form 10-Q reporting the Company’s financial results can be found at www.sec.gov.
Development is currently underway on the Company’s Yeso and Bone Springs acreage with the Company’s working interest partners. The Company currently has a drilling inventory across these formations with varying non-operated working interests ranging from 1.05% to 43.75%. In the coming months, management intends to place greater emphasis on the Company’s operated properties, primarily in the Tom Tom/Tomahawk area (with interests from 37% to 100%).
Recently, Cross Border submitted a remediation plan to the Bureau of Land Management to resolve the agency’s concerns related to prior operator neglect in the Tom Tom/Tomahawk area, where the Company sees significant production potential. Cross Border expects to commence workovers and recompletions on existing wells while executing the remediation plan.
Cross Border owns approximately 6,200 net acres in the Tom Tom/Tomahawk area, which is not fully developed on 40 acre spacing. The Company is working towards improving production and increasing proved reserves by recompleting existing wells, continuing development drilling on 40 acre spacing, and downspacing to 20 acre spacing.
“We believe the Tom Tom/Tomahawk area has significant potential and expect to deploy resources in this area,” Barksdale noted. “Additionally the Tom Tom/Tomahawk area provides a large PUD inventory for development drilling that could turn into a multi-year development plan once the downspacing is implemented.”
In addition to the Tom Tom/Tomahawk area, activity is taking place at the north end of the Turkey Track field and the east end of the Lusk field in the 2ndBone Spring formation with infill development wells being drilled in both areas. The Company could see an additional 450 BOEPD initial net production increase from its ongoing activity if completion and flowback are successful.
“We are continuing to focus on the areas that allow us to increase production and grow reserves,” Barksdale added. “We expect positive results on the existing wells that are in various stages of development and will continue to reinvest our cash flow with a balanced approach. While current production and cash flow are important, we are maintaining a strategy to deliver development inventory which lessens our reliance on other operators. ”
The following chart provides a well-by-well update on Cross Border’s Permian Basin drilling activity:
|WELL NAME||COUNTY||OPERATOR||FORMATION||WORKING INTEREST||STATUS|
|Ocelot 34 Fed Com #1H||Lea, NM||Mewbourne||2nd Bone Spring (Lusk)||12.55%||126 BOEPD (100 BOPD)|
|Fecta 33 Fed Com #1H||Lea, NM||Occidental||2nd Bone Spring (Lusk)||12.50%||536 BOEPD (462 BOPD)|
|Holliday 1H||Eddy, NM||Marshall & Winston||Yeso - Horizontal||6.25%||Making 68 BOPD|
|Zircon "2" LI St #1H||Eddy, NM||Mewbourne||2nd Bone Spring Turkey Track||12.50%||211 BOEPD 176 BO|
|Roo 22 St. #3||Eddy, NM||Occidental||Yeso New Well||3.13%||75BO, 133MCF + 544 BW|
|Roo 22 St. #4||Eddy, NM||Occidental||Yeso New Well||3.13%||36 BO, 52 MCF + 485 BW, Chemical Treatment scheduled|
|Roo 22 St. #5||Eddy, NM||Occidental||Yeso New Well||3.13%||10 BO, 22 MCF + 180 BW|
|Roo 22 St. #1||Eddy, NM||Occidental||Yeso||3.13%||Infill Development Well Pump Issues, shut-in due to C-104, 128 BOPD, 23 MCF, 336 BWPD|
|Roo 22 St. #2||Eddy, NM||Occidental||Yeso||3.13%||58-10 BOPD, 35-51 MCF PD, 80-180 BWPD|
|Roo 22 St. #6||Eddy, NM||Occidental||Yeso||3.13%||Infill Development Well, Testing 30-0 BOPD, 268-452 BWPD Just Overload|
|Roo 22 St. #7||Eddy, NM||Oxy USA||Yeso New Well||3.13%||85 BOPD, 640 BWPD One day only - Facility Problems|
|Roo 22 St. #8||Eddy, NM||Oxy USA||Yeso New Well||3.13%||110 BOPD, 222 MCF + 782 BWPD Oct 24 PCP (pump) Problems, Flowline problems, Shut-in due to C-104|
|Roo 22 St. #11||Eddy, NM||Occidental||Yeso New Well||3.13%||Well TD, Frac scheduled, Completion Stage|
|Roo22 St. #13||Eddy, NM||Occidental||Yeso New Well||3.13%||Well TD, Frac Scheduled, Completion Stage|
|Bradley 30 #2H||Eddy, NM||Mewbourne||2nd Bone Spring Turkey Track||6.25%||301 BOEPD (209 BOPD)|
|Bradley 29 #3H||Eddy, NM||Mewbourne||2nd Bone Spring Turkey Track||6.25%||220 BOEPD (169 BOPD)|
|Lusk SE Fed 33 #2H||Lea, NM||Cimarex||2nd Bone Spring (Lusk)||37.50%||233 BOEPD (173 BOPD)|
|Lusk SE Fed 33 #3H||Lea, NM||Cimarex||2nd Bone Spring (Lusk)||37.50%||303 BOEPD (228 BOPD)|
|Fecta 33 Fed Com #2H||Lea, NM||Oxy||2nd Bone Spring (Lusk)||12.50%||In Completion Stage, Infill Development Well, Waiting on BLM NOI Approval for Completion (Casing Integrity Problems)|
|SE Lusk 28 #1||Lea, NM||Apache||2nd Bone Spring (Lusk - Vertical)||43.75%||Production Constrained by storage;Note: Vertical 118 BOEPD (82 BOPD)|
|SE Lusk 34 #1H||Lea, NM||Apache||2nd Bone Spring (Lusk)||43.75%||Infill Development Well, Running shallow casing|
|SE Lusk 34 #2H||Lea, NM||Apache||2nd Bone Spring (Lusk)||43.75%||Infill Development Well, will not complete until ready to complete 1H|
|Grave Digger #5H||Eddy, NM||Concho||Yeso Horizontal||5.60%||Signed AFE, Infill Development Well|
|Burkett 16 State 15H||Eddy, NM||Concho||Yeso Horizontal||6.25%||In Completion Stage, Infill Development Well|
|Bradley 30 #3H||Eddy, NM||Mewbourne||2nd Bone Spring Horizontal||6.25%||Infill Development Well, Well TD 12,599, 4307' lateral|
|Zircon 2 EH State 1H||Eddy, NM||Mewbourne||2nd Bone Spring||12.50%||Infill Development Well , Well TD 12,528', 4301' Lateral, Waiting on Completion|
|Southern Union 30 State #1||Eddy, NM||Lime Rock||Yeso Glorieta||12.50%||84 BOEPD (55 BOPD)|
|Boquillas 18 Federal #1||Eddy, NM||Apache||Paddock/Blinbry||Did not Participate||Wildcat, 25 BOPD, 252 BWPD, 24 MCF, well pumping off from Paddock. Lower and middle Blinebry dry.|
|Brown Bear 14 State 1H||Lea, NM||Devon||2nd Bone Spring||3%||In Completion Stage, Infill Development Well, 44 BOPD, 35 MCF + 1106 BWPD Tubing Pressure 280, TLTR 26,000 BW|
|Wattam Federal #6 SWD||Chaves, NM||Cross Border||Tom Tom - San Andres||100%||Restored Casing Integrity, Workover|
|Miller Federal #6 SWD||Chaves, NM||Cross Border||Tom Tom - San Andres||100%||Restored Casing Integrity, Workover|
|Tom 36 State #1 SWD||Chaves, NM||Cross Border||Tomahawk - San Andres||100%||Restored Casing Integrity, Workover|
|Bandit 15 Fed #2||Lea, NM||Three Rivers/ Concho||Bone Spring||13.67%||Old Well Workover|
|Leo 3 Fed Com 2H||Chaves, NM||Concho||Abo-Wolfcamp||6.25%||428 BOEPD (363 BOPD)|
This news release contains forward-looking statements that are not historical facts and are subject to risks and uncertainties. Forward-looking statements are based on current facts and analyses and other information that are based on forecasts of future results, estimates of amounts not yet determined, and assumptions of management. Forward-looking statements are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "aims", "potential", "goal", "objective", "prospective", and similar expressions or that events or conditions "will", "would", "may", "can", "could" or "should" occur. Information concerning oil or natural gas reserve estimates may also be deemed to be forward-looking statements, as it constitutes a prediction of what might be found to be present when and if a project is actually developed.
Actual results may differ materially from those currently anticipated due to a number of factors beyond the reasonable control of the Company. It is important to note that actual outcomes and the Company's actual results could differ materially from those in such forward-looking statements. Factors that could cause actual results to differ materially include misinterpretation of data, inaccurate estimates of oil and natural gas reserves, the uncertainty of the requirements demanded by environmental agencies, the Company's ability to raise financing for operations, breach by parties with whom the Company has contracted, inability to maintain qualified employees or consultants because of compensation or other issues, competition for equipment, inability to obtain drilling permits, potential delays or obstacles in drilling operations and interpreting data, the likelihood that no commercial quantities of oil or gas are found or recoverable, and our ability to participate in the exploration of, and successful completion of development programs on all aforementioned prospects and leases. Additional information risks for the Company can be found in the Company's filings with the U.S. Securities and Exchange Commission.
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