Ongoing repairs from hurricanes Ike and Gustav last September continued to hammer Stone Energy’s production at year’s end, the company said late Monday. However, Stone still managed to increase its estimated year-end 2008 proved reserves to 519 Bcfe, well ahead of the 403 Bcfe at year-end 2007.

Production from the Gulf of Mexico (GOM) continues to be “adversely affected” by third-party and company pipeline repairs and shut-ins, the Lafayette, LA-based producer said. Stone exited 2008 producing 200 MMcfe/d. To date another 20-25 MMcfe/d has come back on line (225 MMcfe/d on Feb. 1), driven primarily by the return of the Bluewater pipeline.

Stone estimated that another 35-40 MMcfe/d remains shut-in, including 20-25 MMcfe/d in oil and gas volumes at Mississippi Canyon Block 109 from the Amberjack platform. The pipeline from the Amberjack platform was damaged in two sections, Stone noted. Plans to redirect and repair the pipe are under way.

The producer doesn’t expect the pipe to be operational before late summer. Until the, Stone said, it would “examine the economics” of barging produced oil from the platform beginning this spring.

Stone’s capital expenditure (capex) budget for 2009 was set at $300 million, excluding acquisitions. About 75% of the capex is to be spent on exploitation projects, supporting facilities and abandonment projects. The remaining budgeted capex includes GOM exploration drilling (shelf and deepwater), seismic and reprocessing projects and acreage acquisition and drilling in Appalachia.

Given the delay in Amberjack production, the 2009 capex budget and an expected natural decline in production, Stone is now projecting that its 2009 net output will average 210-240 MMcfe/d.

The company is scheduled to issue its quarterly earnings report on Feb. 17.

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