Resaca continues to build shareholder value by acquiring, exploiting and producing oil and gas from its West Texas and New Mexico Permian Basin properties. Resaca's exploitation plan includes the drilling of infill wells, opening behind pipe zones, re-completing wells, reactivating and optimizing waterfloods, improving field infrastructure and, subsequently, CO2 flooding.

Over the last twelve months, the Company has primarily focused its exploitation efforts on its largest property, the Cooper Jal Unit located in Southeast New Mexico. As of June 30, 2009, the Cooper Jal Unit contained greater than 11 MMboe of proved and probable net reserves. At Cooper Jal, the Company has successfully maintained its targeted water injection levels of over 18,000 bw/d since July 2009.

The increased water injection, along with facility upgrades and injection well cleanouts, has resulted in significant reservoir response, which have increased gross production at the Cooper Jal from 450 boe/d to currently over 565 boe/d. Resaca's net revenue interest in the Cooper Jal Unit is approximately 56 percent.

In addition, as expected, the reservoir response has seen increased average daily total fluid volumes produced (from 8,600 bf/d to 10,900 bf/d), decreased the field's average gas to oil ratio (1,500 to 900 standard cubic feet/bbl), and increased bottom hole pressures throughout the field. These positive developments confirm Resaca's ability to execute its plan of re-pressuring the reservoir to an optimal level in preparation of the Company's planned CO2 flood at the property. Further production increases are expected as the Company implements future phases of the water injection program at Cooper Jal.

Tags: Resaca Exploitation