Irving, TX-based Magnum Hunter Resources Inc. is participating in seven new oil and gas discoveries on the Outer Continental Shelf (OCS) of the Gulf of Mexico. The company estimates that initial production rates from these discoveries should be approximately 30 MMcfe/d net when production begins. Magnum Hunter’s current production from the Gulf is approximately 53 MMcfe/d. Once the company completes some onshore divestitures of non-core assets, total company-wide production (including onshore) will be about 210 MMcfe/d. The discoveries include South Timbalier 264, with estimated first production in the third quarter. First production is expected to begin early next year for three other discoveries, West Cameron 347 and 426 and East Cameron 377. Those starting up in mid-2003 are Eugene Island 299 and 355. Eight prospects currently drilling or scheduled to spud by year-end have potential reserves of more than 550 Bcfe gross, or approximately 60 Bcfe net to Magnum Hunter. Since initiating an exploration program in the Gulf in May 1999, Magnum Hunter has developed an inventory of 135 OCS Blocks (634,000 gross acres) and has maintained an 86% drilling success rate with 45 out of 52 wells drilled to date.

Berry Petroleum Co. said Tuesday that it has leased mineral rights in over 170,000 acres in the Cherokee Basin in Eastern Kansas, with the intent to test and develop coalbed methane (CBM) natural gas production from the multiple coal seams underlying the acreage. The Bakersfield, CA-based oil and gas company said it purchased mineral leases in approximately 110,000 acres of this total acreage position in a single transaction from El Paso Production Co. for an undisclosed sum. “The Cherokee Basin in eastern Kansas is considered an emerging basin with significant CBM development potential and could establish a new core area for the company to add natural gas, thereby diversifying our reserve mix,” said Jerry V. Hoffman, CEO of Berry. “Successful CBM development utilizes Berry’s core competencies of efficient use of capital and operating cost control. CBM development in the Cherokee Basin offers an excellent strategic fit as it is located in a strong natural gas market and future development could be of meaningful size to Berry.” Michael Duginski, vice president of corporate development, added, “We are budgeting approximately $2 million to drill and begin the dewatering process in the fourth quarter of 2002. We believe, and are hopeful, that our pilot programs will verify the gas content and permeabilities of the coal, and thus its economic potential. Our goal is to determine by mid-to-late 2003 if full development is commercial, at which time we could begin full exploitation.”

©Copyright 2002 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.