Three North American-focused independents — Magnum Hunter Resources Inc., Ultra Petroleum and Nuevo Energy Co. — all saw their fourth quarter 2003 production volumes rise along with earnings. The production gains, they said, set the stage for even stronger results by the end of this year.

Magnum Hunter Resources Inc. saw its production volumes, 69% of which are natural gas, rise 13% in the fourth quarter to 18.7 Bcfe or 203.7 MMcfe/d. However, volumes were flat sequentially, which Magnum blamed on weather-related shut-ins at Main Pass 160 and a flowline rupture at Main Pass 263.

Magnum Hunter’s production exit rate on Dec. 31, 2003 was 195-200 MMcfe/d. However, with several offshore properties scheduled to begin producing in the first quarter, the daily production rate “should again exceed 210 MMcfe/d, and our full year 2004 mid-point average production guidance remains at 220 MMcfe/d,” the company said. Oil and natural gas production for the year increased 16% over 2002 to 73.1 Bcfe or 200.1 MMcfe/d.

In the fourth quarter, the Irving, TX-based independent reported net income was $7.3 million (11 cents/diluted share), an increase of 137%, compared with net income of $3.1 million (4 cents/diluted share). Total revenues were $83.9 million, an increase of 14% from revenues of $73.7 million in 4Q2002. Operating profit was $24.2 million, an increase of 23% over $19.7 million reported a year earlier. For the year, Magnum Hunter reported a 68% increase in net income, which totaled $26.1 million (39 cents/diluted share), as compared to net income of $15.5 million (25 cents) in 2002. Total revenues were $325.0 million, up from $265.9 million in 2002. Operating profit was $92.7 million during 2003, 35% higher than the reported $23.8 million in 2002.

Magnum CEO Gary C. Evans said the company had accomplished several goals in 2003, and even though “commodity prices were at all time highs, unfortunately, due to commodity price hedges predominately inherited from our acquisition of Prize Energy two years ago, we were not able to benefit as much as our peers. However, that all changed at year-end 2003, and we are now experiencing net margins that will drive our revenues, cash flow, and net earnings to unprecedented levels during 2004.”

Houston-based Ultra Petroleum, which focuses on the Green River Basin in Wyoming and offshore China, reported fourth quarter production increased 59% to 9.7 Bcfe, compared with 6.1 Bcfe for 4Q2002. CEO Michael D. Watford said this year, Ultra will begin its most aggressive drilling program in history, and expects to grow production by 38% to 40 Bcfe. It also expects to grow proved reserves by another 20% to 1.3 Tcfe.

Ultra’s 2003 earnings jumped 461% to total $45.3 million (58 cents/diluted share), compared with $8.1 million (10 cents) in 2002. Meanwhile, production increased 66 % to 28.9 Bcfe, compared with 17.4 Bcfe for 2002. Earnings for the fourth quarter were $19.2 million (24 cents), a 367 % increase from $4.1 million (5 cents) for the same period in 2002.

Nuevo Energy Co., also based in Houston, reported total production in the fourth quarter of 49.5 Mboe/d, its highest quarterly level in two years and slightly ahead of 49.1 Mboe/d reported in 4Q2002.

Increased production was attributed to increased production from the Pakenham Field in West Texas and the Point Pedernales Field offshore California (increased working interest), which more than offset normal field declines. Nuevo’s fourth quarter natural gas production was 40.0 MMcf/d, compared with 39.8 MMcf/d in 4Q2002. Total production from continuing operations increased 4% to 48.8 Mboe/d in 2003, up from 46.9 Mboe/d in 2002. The company’s natural gas production increased 22% to 38.5 MMcf/d, up from 31.5 MMcf/d in 2002.

Nuevo’s reported fourth quarter income was up 95% to $8.4 million (42 cents/diluted share), versus $4.3 million (22 cents) for 4Q2002. For the year, Nuevo reported a 61% increase in income from continuing operations to $37.1 million ($1.89), compared with $23.1 million ($1.30) on higher crude oil and natural gas production and prices.

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