XTO Energy Inc. expects to grow its natural gas-heavy production base about 12% more than last year, with more than half of its development budget directed to East Texas activities. Meanwhile, Magnum Hunter Resources Inc. raised its week-old fourth quarter forecast, calling the previous estimate too conservative. And for smaller independent Remington Oil & Gas Co., recent exploratory successes have convinced the company to add more to its capital budget.

XTO plans to spend $400 million this year on development and exploration, drilling 309 (255 net) wells and performing about 385 (283 net) workovers and recompletions. In East Texas alone, about 65% of the budget will be used to drill 149 new wells and 60 workover activities.

For the San Juan and Arkoma basins, XTO will allocate approximately 20% of the development funds, evenly distributed, to drill 114 new wells and perform 207 workovers. An expected 10% of the budget will be directed toward Alaska, the Permian Basin and the Hugoton Royalty Trust properties. On exploration, XTO plans to spend about $20 million.

“Our disciplined and well-established development programs continue to provide top-tier performance — meaning consistent internal growth with healthy economic returns for the shareholders,” said CEO Bob R. Simpson. “For XTO Energy, 2003 will offer another exciting year dedicated to measured growth, financial strength and new opportunity.”

XTO said it also remains on track to increase its natural gas production this year by 15%, a forecast it had made in December after completing its acquisition of coalbed methane properties in southwestern Colorado (see Daily GPI, Dec. 31, 2002). The acquisition added another 29 MMcf/d to XTO’s production base.

Irving, TX-based Magnum Hunter, which plans to spend $115 million this year on exploration and production activities, on Monday raised its earnings forecast for the final quarter of 2002, citing higher commodity prices, production levels and cost estimates. The company said daily production for the quarter will average between 195 MMcf to 202 MMcf, up from a forecast last week of 182 MMcf to 201 MMcf (see Daily GPI, Dec. 31, 2002 ). Magnum Hunter also raised its earnings estimate for the fourth quarter to between 4-6 cents/share, up from an earlier estimate of 0-2 cents.

Recent exploratory successes in the Gulf of Mexico (GOM) convinced small Dallas-based independent Remington Oil and Gas Corp. to increase its 2003 capital budget by $10 million, which now is set at $96 million for new completions, facilities and development drilling. The increase will be funded through available cash flows. Three new gas and oil discoveries have been made in the Gulf at South Marsh Island Block 24, Eugene Island Block 159 and Eugene Island Block 397, and one onshore at Tatum Dome Prospect located in the Interior Mississippi Salt Basin. All but Eugene Island 397 are operated by the company.

A deeper pool discovery was made at the Eugene Island 397 A-7 well, which encountered 70 feet of apparent oil and gas pay in two sand packages. It is currently being sidetracked because of mechanical difficulties encountered, but production is set to begin in February. Remington owns a 37.5% working interest in the Eugene Island 397 field. W&T Offshore Inc. operates this field with a 50% working interest, and Magnum Hunter Resources owns the remaining 12.5% working interest.

Offering guidance for the fourth quarter, the gas-heavy independent expects to have production of about 6.4 Bcfe, lower than previous guidance because of greater than expected damage from Hurricane Lili and delays on installations of new facilities during the quarter. In 2002, Remington’s production exit rate was 90 MMcfe/d — which is close to the company’s expectations for the first quarter of this year: 90-95 MMcfe/d. In 2003, production volumes are expected to range between 35-37 Bcfe, a 25-32% increase over 2002 levels. The estimates were based on current projects, and don’t include any success from 2003’s exploratory program, the company said.

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