Producing

Quebec isn’t known for its natural gas production and there’s a good reason for that: there’s only one field with just one producing well in the whole province and it’s been out of service since April 2002. However, Junex, which holds 3.5 million acres under exploration permits in the province with proven reserves of over 728 MMcf/d, said it is about to bring the Galt field near Gaspé back online next month at a relatively high rate.

Pogo Producing Co.’s net income in 2002 increased to $107 million, or $1.85 per share, from $88 million, or $1.72/share, in 2001. Chairman Paul G. Van Wagenen said the company replaced its production for the eleventh consecutive year despite having record production. Much of the increase came from Pogo’s successful drilling in the Gulf of Mexico as well as from steady production growth in the Gulf of Thailand, he said. Pogo’s 2002 fourth quarter net income was $37.8 million, or $0.62 per share, compared to $1.4 million, or $0.03 per share in 2001. Discretionary cash flow in 2002 was $492.9 million, up 31%. In the fourth quarter of 2002, discretionary cash flow was $135.8 million compared to $67.5 million in the fourth quarter 2001. “Pogo enjoyed exceptional results with the drill bit in 2002,” said Van Wagenen. “The company drilled a worldwide total of 172 gross wells, 159 of which were successfully completed, a 92% success rate. For a company with a meaningful exploration program, that ratio is truly extraordinary.” Pogo added enough new proven oil and natural gas reserves to replace an estimated 122% of its 2002 worldwide production. New reserves added in the United States reflect a 129% domestic production replacement rate. Pogo’s year-end estimated equivalent proven oil and natural gas reserves rose to 1.6 Tcf. Pogo’s 2002 daily production of natural gas averaged 279 MMcf/d, up 17% from 2001. In the fourth quarter, natural gas production averaged 282.1 MMcf/d, up 13% from the fourth quarter of 2001. Pogo’s board approved a $320 million capital and exploration budget for 2003, which compares to $362 million in 2002. “Pogo plans to drill an unprecedented number of exploration and development wells in 2003: 226 gross wells, including 62 in the Gulf of Thailand, six in Hungary and one in the Denmark North Sea. It will be our most aggressive drilling schedule to date,” said Van Wagenen.

Pogo Producing Co.’s net income in 2002 increased to $107 million, or $1.85 per share, from $88 million, or $1.72/share, in 2001. Chairman Paul G. Van Wagenen said the company replaced its production for the eleventh consecutive year despite having record production. Much of the increase came from Pogo’s successful drilling in the Gulf of Mexico as well as from steady production growth in the Gulf of Thailand, he said. Pogo’s 2002 fourth quarter net income was $37.8 million, or $0.62 per share, compared to $1.4 million, or $0.03 per share in 2001. Discretionary cash flow in 2002 was $492.9 million, up 31%. In the fourth quarter of 2002, discretionary cash flow was $135.8 million compared to $67.5 million in the fourth quarter 2001. “Pogo enjoyed exceptional results with the drill bit in 2002,” said Van Wagenen. “The company drilled a worldwide total of 172 gross wells, 159 of which were successfully completed, a 92% success rate. For a company with a meaningful exploration program, that ratio is truly extraordinary.” Pogo added enough new proven oil and natural gas reserves to replace an estimated 122% of its 2002 worldwide production. New reserves added in the United States reflect a 129% domestic production replacement rate. Pogo’s year-end estimated equivalent proven oil and natural gas reserves rose to 1.6 Tcf. Pogo’s 2002 daily production of natural gas averaged 279 MMcf/d, up 17% from 2001. In the fourth quarter, natural gas production averaged 282.1 MMcf/d, up 13% from the fourth quarter of 2001. Pogo’s board approved a $320 million capital and exploration budget for 2003, which compares to $362 million in 2002. “Pogo plans to drill an unprecedented number of exploration and development wells in 2003: 226 gross wells, including 62 in the Gulf of Thailand, six in Hungary and one in the Denmark North Sea. It will be our most aggressive drilling schedule to date,” said Van Wagenen.

BP started producing about 15,000 b/d of oil and 12 MMcf/d of gas from a single well at its Horn Mountain development in the Gulf of Mexico. Production from the facility, which is located in 5,400 feet of water 100 miles southeast of New Orleans, is expected to reach a peak rate next year of more than 65,000 b/d of oil and 68 MMcf/d of gas after a total of seven production wells are completed. BP started exploration on the field in July 1999 after acquiring leases in 1997 and 1998. The first discovery was announced in August 1999, and BP and partner Occidental Petroleum began delineation drilling immediately after that. The $600 million project, which includes the deepest free-floating dry tree drilling system in the world, went from discovery to production in about 40 months. It is expected to result in ultimate recovery of an estimated 150 million boe. BP is the operator and holds a 67% equity interest. Occidental Petroleum holds the remaining 33%.

Marathon Oil Co.’s Camden Hills field in the ultra-deepwater of the Gulf of Mexico has begun producing natural gas at a rate of 50 MMcf/d from the first two fields, and is expected to reach peak production of 100 MMcf/d later this month. The production is flowing from a new world-record water depth of 7,209 feet.

Marathon Oil Co.’s Camden Hills field in the ultra-deepwater of the Gulf of Mexico has begun producing natural gas at a rate of 50 MMcf/d from the first two fields, and is expected to reach peak production of 100 MMcf/d later this month. The production is flowing from a new world-record water depth of 7,209 feet.

Tropical Storm Isidore may not have gained the speed that Hurricane Lili is producing, but it was strong enough to blow a hole into BP plc’s production forecast for 2002. The company, which will still have to tally Lili’s consequences, blamed the September storm for a predicted year-end production growth of 4% over a year ago, which is 1% less than its forecast a month ago.

Tropical Storm Isidore may not have gained the speed that Hurricane Lili is producing, but it was strong enough to blow a hole into BP plc’s production forecast for 2002. The company, which will still have to tally Lili’s consequences, blamed the September storm for a predicted year-end production growth of 4% over a year ago, which is 1% less than its forecast a month ago.

Offshore Nova Scotia is on the precipice of becoming a vital natural gas producing basin in North America, and will play a “dominant role” in supplying the U.S. Northeast, the Maritimes and possibly central Canada, according to a new report by the Ziff Energy Group.