The board of directors of Energy Partners Ltd. (EPL) on Wednesday approved an initial exploration and development budget of $360 million for 2006, representing an 18% increase over the 2005 budget of $305 million and an 80% increase over the initial 2005 exploration and development budget of $200 million.
EPL said the budget for 2006 includes funds for seismic and lease acquisition in water depths up to 5,000 feet in the Gulf of Mexico, which is a new focus area for the company that will augment its existing operating areas on the Gulf shelf and in south Louisiana. The 2006 budget also includes funds for the drilling of the Denali prospect at East Bay. The company recently announced that it had finalized the partners for the first well, which is expected to spud near year-end. EPL will hold a 40% working interest in this first well.
"Our initial 2006 budget will allow us to achieve a number of objectives over the next twelve months that will further the growth and development of the company," EPL CEO Richard A. Bachmann. "We will continue to prosecute our shelf drilling program as we have in the past several years, and will layer in more exciting higher potential opportunities. One such example is our first well on the Denali prospect. We will also launch our deepwater effort in a measured way, and we expect to be active beginning with the March 2006 lease sale.
"Lastly, we expect to drill the first deep prospect in our recently acquired south Louisiana focus area in the coming months," Bachmann added. "Most importantly, the 2006 exploration and development budget as projected will be funded entirely through internally generated cash flow, giving our investors full upside exposure to the potential of the program. We have a higher quality portfolio with more internally generated prospects than we have ever had. That leaves me as optimistic as I have ever been about our future."
Founded in 1998 and based in New Orleans, LA, EPL is an independent oil and natural gas exploration and production company with focus along the U.S. Gulf Coast, both onshore in south Louisiana and offshore in the shallow to moderate depth waters of the Gulf shelf.
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