Looking to step up its production to help meet natural gas demand, Energy Partners Ltd. (EPL) said Wednesday that its board of directors has approved a 16% increase in its 2004 exploration and development budget from $125 million to $145 million.

The New Orleans-based E&P independent said the increase in the budget will primarily fund increased exploratory activities as well as development of recent exploratory successes. Of the $145 million budget, approximately 60% is allocated to low-risk exploitation and development activities, 25% to moderate-risk exploration, and 15% to higher-risk, higher-potential exploration. EPL said it expects to fully fund its capital budget from internally generated cash flow.

“With the board’s approval of the increase in the capital budget, we plan to add at least four more exploratory wells this year and now expect to drill at least 30 exploratory wells in 2004,” said Richard A. Bachmann, EPL’s founder and CEO. “So far this year we have five successful exploratory wells out of six drilled, and we currently have three exploratory wells drilling. We have a wealth of opportunities to deploy the additional $20 million in our capital budget, and with continued high commodity prices and cash flow we look forward to adding even more projects to our 2004 program.”

Earlier in the week, the company announced that it had recently completed drilling two exploratory wells, one successful at East Cameron 161 and one unsuccessful at West White Lake. The company also said that it was high bidder on three tracts at the May 12 Louisiana State Lease Sale covering portions of South Pass Blocks 26, 27, 38 and 39.

For the year to date, EPL has drilled five successful exploratory wells and two development wells. The company currently has exploratory tests in progress at three locations: South Timbalier 41, East Buck Point and High Island A-6.

At the recent Louisiana State Lease Sale, EPL submitted high bids totaling $1.3 million on three tracts covering state water portions of South Pass Blocks 26, 27, 38 and 39. In total, the new leases cover approximately 5,200 acres, and all of the tracts are contiguous with EPL’s existing acreage at East Bay. The company noted that the acquisition of the three new tracts completes the lease position for EPL’s high-risk, high-potential deep prospect at East Bay known as Denali.

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