XTO Energy Inc., Denbury Resources Inc. and Marathon Oil Corp. on Friday indicated they expect to keep production levels up this year, although investment in new opportunities may be delayed until commodity prices rise.

In its guidance for 2002, Fort Worth-based XTO Energy Inc. estimates that natural gas production will average between 480 MMcf/d and 495 MMcf/d. Natural gas liquids production is expected to be relatively flat during 2002 at daily rates between 4,000 bbl and 4,500 bbl. Oil production should average 12,500 bbl/d-13,500 bbl/d.

XTO said “realized natural gas prices are expected to be $0.20 to $0.30 below the NYMEX Henry Hub index, before consideration of hedging activities.” Almost 80% of expected 2002 gas production is currently hedged at a NYMEX price of $3.88/Mcf. Natural gas liquids prices are expected to be approximately 55%-65% of the average NYMEX oil price. The company’s realized oil prices should be about $2.00 below the average NYMEX price. Gas gathering, processing and marketing revenues, net of expenses, are expected to be about $2 million.

Dallas-based Denbury Resources Inc. issued its year-end reserve report on Friday, using unescalated year-end 2001 commodity prices of $19.84/bbl and $2.57/MMBtu. Using these prices, Denbury’s total proved reserves were 76.5 million bbl and 198.3 Bcf, or 109.5 MM boe (on a 6:1 basis), a 25% increase from 2000’s year-end quantities. Approximately 75% of the 2001 year-end proved reserves were categorized as proved developed.

Denbury CEO Gareth Roberts said, “Even though prices have declined substantially, during 2001 we replaced production 3.7 times (excluding the downward revisions due to price changes) with approximately 54% of our new reserves coming from acquisitions and 46% coming from our development program.” He said Denbury had “identified several more opportunities on these properties although most of these opportunities will not be exploited until natural gas prices recover.”

This year, Denbury expects production will average approximately 35,250 boe/d. “Although the recent drop in prices has lowered the company’s projected cash flow for 2002 to an amount that is close to its budgeted expenditures, with the company’s hedges that cover over 75% of its projected natural gas production and over 60% of its projected oil production, the impact of further potential price declines will be significantly reduced,” it said in a statement.

Houston-based Marathon Oil Corp. on Friday also released its budget for this year, announcing it will spend $1.8 billion on capital, investment and exploration programs. The budget is 3% higher than last year’s budget (see related story).

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