Magnum Hunter Resources said a subsidiary has entered into a sale-leaseback transaction on three newly constructed offshore production platforms and associated pipelines that were recently placed into service. The three platforms are located offshore Louisiana in federal waters and are located on OCS Lease Blocks South Timbalier 266, Main Pass 164 and Main Pass 178. The company has received a total of $11.2 million in new funding that has been used for general corporate purposes, including a voluntary reduction under the company’s corporate bank revolving credit facility. No reduction in its existing bank revolving credit commitment resulted from these new lease transactions. The new production platforms are being leased from a syndicate group of lenders led by General Electric Capital Corp. The leases have a primary term of three years and based upon current interest rates, the cost of funds to Magnum Hunter is 5.30% per annum. CFO Chris Tong said, “The financing terms are very attractive to Magnum Hunter given today’s low interest rate environment. With the funding received from the closing of this transaction, our company can re-deploy capital back into our core business of drilling and developing some of our recent new oil and gas discoveries.”

Swift Energy expects to report a production increase of 10% to 11.5 Bcfe for the fourth quarter of 2001 compared to 10.5 Bcfe in the fourth quarter of 2000, but down slightly from 11.7 Bcfe in the third quarter of 2001. The average oil price received by the company for fourth quarter production is estimated to exceed $16/bbl, while the average natural gas price is expected to be above $2.20/Mcf. This should result in a composite average price for the fourth quarter of at least $2.40/Mcfe. The company also reported that it would establish a reserve allowance of $1.4 million before taxes to account for natural gas sold to Enron North America in November 2001 for which payment has not yet been received. This represents its entire exposure to Enron. Swift said it expects to report an increase in proven reserves for year-end 2001 of 2-5% with a reserve replacement rate between 128% and 170%. Due to the recent dramatic decline in oil and gas prices, the company also expects to take an after-tax, non-cash charge against its 2001 earnings based on a Dec. 31, 2001 ceiling test impairment. The company currently estimates that production for the first quarter of 2002 will range between 11 and 11.5 Bcfe and between 48 and 58 Bcfe for the full calendar year 2002. Its capital budget for 2002 is $106.5 million, exclusive of the net effect of any acquisitions and dispositions, down 58% from 2001. Swift will report 2001 fourth quarter and full year earnings on Thursday.

Woodward Marketing LLC, a subsidiary of Atmos Energy Marketing, has acquired about $1 million worth of natural gas sales contracts from Duke Energy Trading and Marketing LLC. Under the contracts, Woodward will provide natural gas procurement and management services for approximately 40 municipal customers in Illinois, Indiana, Kentucky, Tennessee, Mississippi, Louisiana and Texas, which together have an annual gas throughput of 7.5 Bcf. Atmos Energy Marketing is one of Dallas-based Atmos Energy Corp.’s nonutility operations organized under Atmos Energy Holdings Inc.

©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.