Producing

Mexico’s Petroleos Mexicanos (Pemex) reports a test well in an offshore deposit in the Veracruz state, the Lankahuasa, is yielding dry gas production of 15.4 MMcf/d. The Lankahuasa is one of three newly discovered sources of non-associated natural gas announced in March by Pemex.

Canadian producers have been surprisingly effective in increasing producing despite steep wellhead decline rates and expectations that the response to drilling would be weak, according Lehman Brothers. Data recently released by Canadian pipelines shows gas production was up 9.3% or 1.3 Bcf/d in November from November 2000, which was following the 8.4% increase in October. However, E&P expenditures are expected to be down 20% this year and rig utilizations already have dropped by 21%.

Canadian producers have been surprisingly effective in increasing producing despite steep wellhead decline rates and expectations that the response to drilling would be weak, according Lehman Brothers. Data recently released by Canadian pipelines shows gas production was up 9.3% or 1.3 Bcf/d in November from November 2000, which was following the 8.4% increase in October. However, E&P expenditures are expected to be down 20% this year and rig utilizations already have dropped by 21%.

While many other producing regions are struggling just to maintain production levels, the Rocky Mountain region continues to see incremental growth, prompting gathering and processing expansions last week by Williams and Duke. Williams completed a $45 million gathering and processing system upgrade in Wamsutter, WY, that will boost processing capacity by 140 MMcf/d and add 70 MMcf/d of gathering. Meanwhile, Duke Energy Field Services completed its third expansion in the Denver-Julesburg (D-J) Basin, adding a new 33 MMcf/d processing plant northeast of Denver.

Stone Energy Corp. has announced that the acquisition of interests in eight producing oil and gas properties and related assets located in the Gulf of Mexico was completed on Dec. 31, 2001. The final aggregate purchase price, as previously announced, was $299.7 million and was financed with net proceeds from Stone’s recently completed offering of $200 million of 8.25% senior subordinated notes due 2011, and borrowings under its bank credit facility.

Stone Energy Corp. announced Wednesday that the acquisition of interests in eight producing oil and gas properties and related assets located in the Gulf of Mexico was completed on Dec. 31, 2001. The final aggregate purchase price, as previously announced, was $299.7 million and was financed with net proceeds from Stone’s recently completed offering of $200 million of 8.25% senior subordinated notes due 2011, and borrowings under its bank credit facility.

Pioneer Natural Resources and Mariner Energy announced plans to start producing up to 175 MMcf/d of gas in early 2003 from the Falcon field in the deepwater Gulf of Mexico. Gas reserves currently are estimated to range from 175 to 240 Bcfe. The Falcon field is located 100 miles east of Corpus Christi in 3,400 feet of water in East Breaks 579/623 and is among four major prospects Pioneer expects will boost its production by up to 50% over the next two years.

Pioneer Natural Resources and Mariner Energy announced plans to start producing up to 175 MMcf/d of gas in early 2003 from the Falcon field in the deepwater Gulf of Mexico. Gas reserves currently are estimated to range from 175 to 240 Bcfe. The Falcon field is located 100 miles east of Corpus Christi in 3,400 feet of water in East Breaks 579/623 and is among four major prospects Pioneer expects will boost its production by up to 50% over the next two years.

In just three years, the Burgos Basin in northern Mexico could be producing as much as 1.4 Bcf/d, which would add to the country’s current production level of 4.6 Bcf/d, according to Mexico Energy Minister Ernesto Martens. Of the current total, about 970 MMcf/d already is produced in the massive dry gas basin.