Newsroom

• Reports strong production results from three new wells in South Texas
• Completes its first horizontal oil well in the Escondido formation
• Acquires acreage in Strawn formation in West Texas

Houston, TX – September 19, 2012 - Escondido Resources II, LLC (Escondido) today announced the completion of three significant wells in South Texas and the acquisition of a large acreage position in West Texas.

Located in Webb County’s Hawkville Field, Escondido’s Spohn Ranch 1H well is the highest producing natural gas well to date in the Eagle Ford Shale. Initial production from the Spohn Ranch well exceeded 16 million cubic feet (MMcf) of gas per day, and the well produced more than 400 Mmcf of gas in its first 30 days. The well was completed with a 6,975-foot lateral and 25 fracture stages. Escondido’s plans call for further development of the area.

Escondido Resources also announced the completion of the company’s first horizontal oil well in the Escondido formation. The Storey 4H well is located in LaSalle County, Texas. in the Tres Encanto Field, an area also referred to as the White Kitchen Field. In its first 30 days of production, the Storey 4H averaged nearly 400 barrels of crude oil production per day along with 1.2 Mmcf of associated gas per day. The well was completed with eight frac stages over a 4,475-foot lateral. The company is currently in the process of drilling seven follow-up wells to exploit this important discovery.

Escondido’s latest horizontal oil well in McMullen County, Texas, targeted the Olmos formation. In its first 30 days, production from the Nichols 3H averaged more than 300 barrels per day and 1.1 Mmcf of associated gas per day. The well is the third successful horizontal oil well the company has drilled in the prolific AWP Field. The well was completed with 13 frac stages over a 6,667-foot lateral. The company is currently drilling three additional wells in the AWP Field. 

Acreage Positions in South and West Texas
Escondido Resources has a substantial acreage position in South Texas that includes approximately 60,000 net acres in the shallow Escondido and Olmos formations in Webb, LaSalle and McMullen counties. In addition, Escondido owns the rights to drill the deeper Eagle Ford Shale formation in more than half of its acreage. Current production capacity exceeds 75 million equivalent cubic feet per day (MMcfe/d) from the Wilcox, Escondido, Olmos and Eagle Ford formations. 

The company also announced the acquisition of a large acreage block in West Texas. Escondido has leased nearly 72,000 acres in Pecos and Terrell counties and expects to drill its first well in the fourth quarter of this year with a focus on conventional drilling for crude oil in the Strawn formation.

CEO Perspective
“This has been a great year for Escondido Resources,” said Escondido President and CEO William E. Deupree. “It’s exciting to drill a big well in the Eagle Ford Shale like the Spohn Ranch 1H. We also continue to have success in South Texas in the shallower Escondido and Olmos formations and have expanded our presence eastward into the oilier portions of the these two formations in La Salle and McMullen counties. We’ve also widened our presence by accumulating a large acreage position in East Texas where we expect to apply the stimulation techniques we’ve employed in the Olmos and Escondido formations to the largely overlooked Strawn formation. These initiatives will transform Escondido Resources from a company focused almost entirely on natural gas to a much more liquids-focused entity.” 

About Escondido Resources II, LLC
With headquarters in Midland, Texas, and executive offices in Houston, privately held Escondido Resources II, LLC is focused on the development of conventional and unconventional reserves in South and West Texas. Partners William E. Deupree, Mark E. Semmelbeck, J. Kurt von Plonski and J. David Wrather formed Escondido Resources II LLC as successor to Escondido Resources, L.P. Escondido II is backed by private equity commitments from EnCap Investments L.P.