Houston-based producers ConocoPhillips and Marathon Oil Corp. reported Thursday 4Q2005 oil and natural gas output worldwide will be on the high end of earlier guidance, but they also expect to see higher expenses partly related to hurricane repairs in the Gulf of Mexico.
ConocoPhillips, which announced in December it would buy Burlington Resources (see Daily GPI, Dec. 14, 2005), is forecasting 4Q2005 production of 1.6 million boe/d, with total 2005 output averaging 1.56 million boe/d.
ConocoPhillips' output is higher than the 3Q2005's 1.52 million boe/d, which the producer attributed to the completion of maintenance operations in the North Sea and Alaska. The estimates include Syncrude operations in Canada, but they exclude exploration efforts of Russian-based Lukoil, in which ConocoPhillips holds a 16% stake.
ConocoPhillips' hurricane-related maintenance expenditures in the final quarter are estimated to be $100 million pretax, while exploration expenses are estimated at $220 million. Full-year exploration costs are expected to total about $650 million.
Marathon expects 4Q2005 production to be up significantly from the previous quarter because of strong seasonal gas sales and the restoration of Gulf production. Oil and gas output sold in the final quarter is expected to average between 385,000-390,000 boe/d, compared with 291,500 boe/d in 3Q2005. Estimated 4Q2005 exploration expenses remain unchanged from previous guidance of between $60-$80 million.
In related news, ConocoPhillips said the deepwater Ursa field, in which it is a 16% stakeholder, currently is producing at approximately 80% of pre-Hurricane Katrina production levels, or 15,000 net bbl/d. ConocoPhillips' Green Canyon field remains shut-in for hurricane-related repairs, with minimal production impact of 1,000 bbl/d. ConocoPhillips said both Ursa and Green Canyon are expected to return to "normal" production levels in 1Q2006. However, Shell Exploration, which operates the Ursa field, did not confirm the information.
The Minerals Management Service (MMS) reported Thursday that there has been "minimal improvement" in oil and natural gas output in the past few days, "and this appears to be a trend that will continue with incremental movement over the next several months."
Shut-in gas output on Thursday was 1.879 Bcf/d, or 18.79% of daily offshore production, which is currently about 10 Bcf/d. Cumulative shut-in gas production since Hurricane Katrina is 574.10 Bcf, or 15.7% of the annual gas output in the Gulf, 3.65 Tcf. Evacuations are equivalent to 12.33% of 819 manned platforms; 134 rigs are currently operating offshore.
ConocoPhillips will report actual 4Q2005 results Jan. 25; Marathon will report on Jan. 26.
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