Kerr-McGee Corp. on Wednesday trimmed its third quarter oil and gas production outlook but maintained its full-year guidance after running into problems in the Gulf of Mexico. The independent also warned that a wildcat well offshore still being developed could drop quarterly earnings 15 cents if it’s dry.

The new guidance comes just days after the company said it would reduce its non-union workforce by 7-9% (see Daily GPI, Sept. 18).

The Oklahoma City-based producer cut the top end of its third quarter guidance range by 5.4%, maintaining the low-end and full-year guidance. The new total production range for 3Q is expected to be 242-261 Mboe/d, down from 242-276 Mboe/d. The reduction in the top-end numbers was evenly split between oil and gas. In the first quarter, total production was 292 Mboe/d and in the second quarter, production totaled 271 Mboe/d.

Gas production in 3Q is expected to fall between 675-710 MMcf/d, and in the final quarter, gas production is forecast to be 670-755 MMcf/d. In the first quarter, Kerr-McGee produced 761 MMcf/d; the second quarter production was 697 MMcf/d.

On another front, the independent said that if a planned 25,000 foot wildcat well in its Yorktown prospect is dry, third quarter earnings would drop by 15 cents. So far, Kerr-McGee has spent $25 million on the well, which is 1,600 feet from its target depth. Drilling is expected to resume soon, the company said, however, if it’s dry, exploration expenses in the third quarter would increase $100 million, up from $67 million in the second quarter.

Another wildcat in the Shiner prospect hit oil, but the company said the quantity was not worth the cost of extracting. Its $20 million share of the Shiner well will be included in third quarter expenses.

©Copyright 2003 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.