Plummeting gas prices took a toll on Burlington Resources’ first quarter net income, which tumbled to $48 million, or $0.24 per diluted share, compared to $336 million, or $1.56/share in the first quarter of 2001. Despite a 13% production increase to a record of 2,716 MMcfe/d, including volumes from recently acquired properties, natural gas price realizations averaged only $2.88/Mcf compared to $5.71 in the first quarter of 2001.

“Burlington performed strongly during the quarter as we withstood a commodity price downturn early in the year, and then benefited from our improved production profile as prices rebounded,” said CEO Bobby S. Shackouls. “In the meantime, we continued moving forward with our major development programs and profitable growth initiatives, as well as our non-core property divestiture efforts. These factors, in combination with the generally favorable outlook for natural gas, give us considerable reason for optimism.”

Burlington reported average gas production of 2,019 MMcf/d, up 15%. Gas liquids production rose 36% to 56.3 thousand b/d, and oil production averaged 59.9 thousand b/d, which was down from 66 thousand b/d in 1Q2001. Realized oil prices averaged $21.68/bbl, down from $25.81 with hedging contributing $0.58/bbl. NGLs price realizations also were down to $12.45/bbl from $22.05 during the prior year’s first quarter. Cash costs improved 9% and exploration expenses were down to $57 million from $70 million.

During the quarter Burlington completed the acquisition of the ATCO producing properties in the Viking-Kinsella area of Alberta for $344 million. The company also received better-than-expected response to its planned divestiture program, encouraging it to raise its estimate of sales proceeds to a range of $750 million to $1.2 billion, from the previous target of $500 million. Burlington expects to utilize the proceeds to reduce debt.

For the remainder of the year, Burlington expects overall production to decline from the first-quarter totals as a result of planned property divestitures as well as annual plant and pipeline maintenance usually scheduled during the second and third quarters. The company expects second-quarter 2002 production of natural gas to range from 1,750 to 1,950 MMcf/d with NGLs production of 50,000-60,000 thousand b/d and crude oil production of 42,000-56,000 thousand b/d. Total equivalent production is expected to range from 2,300 to 2,640 MMcf/d.

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