Remington Oil and Gas Corp. said last week that it ended 2004 with reserves totaling approximately 252 Bcfe, marking a 19% increase over year-end 2003 levels. The company's reserves consist of 60% natural gas and 40% oil.
The Dallas, TX-based company reported that capital expenditures for 2004 were estimated at $158 million consisting of $69 million of development costs, $67 million of exploration costs, $12 million of leasehold acquisition costs, and $10 million of seismic and other exploration costs. Included in these totals is $10 million for leasing and seismic data for Remington's expansion into the deeper waters of the Gulf of Mexico. Total dry hole costs included in the capital expenditures were $12 million. The company noted that year-end 2003 reserves were 212 Bcfe, and it produced 38.1 Bcfe during 2004.
Late last month, Remington announced a 2005 capital budget of $145 million and provided an update on the company's drilling and production operations. However, success on exploratory projects will likely increase 2005 capital spending to $200-$225 million, which is expected to be within the company's available cash flow.
Remington's approved budget includes planned exploratory wells and known developments, but does not include the costs associated with completions of new exploratory successes.
Under the 2005 program, Remington said it assumes it will drill 24 offshore exploratory wells and four onshore exploratory wells for a total investment of $79 million. Twelve of the 24 offshore exploratory wells are anticipated to drill to depths below 15,000 feet. The company allotted $41 million for development capital, which will allow for platform and pipeline installations on recent discoveries, along with development drilling on existing fields. The remaining $25 million will be used for seismic acquisitions, workovers, and lease acquisitions.
Remington said its production activities in the fourth quarter 2004 averaged approximately 113 MMcfe/d compared to an average 111 MMcfe/d for the third quarter 2004. The company's annual production totaled 38.1 Bcfe, representing a 9.5% increase over 2003 volumes. The company added that it currently has four development projects scheduled to come online over the next four months.
The company's goals for 2005 are to increase production volumes and reserves between 10% and 15% over 2004 levels.
Remington said its final 2004 audited results will be released before the market opens on March 7, 2005. CEO James A. Watt will host a conference call and webcast on that day at 3:00 p.m. (EST). During the call, Watt will also issue guidance and targets for 2005. To listen to the presentation, visit http://www.remoil.net, or call 1-800-706-3705.
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