“1999 was a very good year for Vastar,” according to VastarResources President Charles D. Davidson, who had the numbers toback up the boast: a 56% increase in earnings over 1998, along witha 170% replacement of reserves.

Vastar’s earnings, announced Wednesday, were $213.1 million or$2.16 per diluted share, compared to $136.4 million ($1.39 perdiluted share) in 1998. The company also announced 1999 fourthquarter earnings of $74.7 million, which were a second consecutivequarterly record and a 315% increase from 4Q 1998. Credit for thequarterly increase went to higher gas prices and cost control.

Meanwhile, Vastar’s total 1999 production — the bulk of it drynatural gas — increased 12% to a record 1,438 MMcfe/d from 1,289MMcfe/d in 1998. Its average annual wellhead gas price went from$1.85/Mcf to $2.01, with the 4Q price leading the rise at $2.34last year compared to $1.78 in 4Q 1998.

Coming off a year that saw a 170% replacement of reserves “atthe lowest replacement cost in its history,” Davidson said Vastarwill increase capital spending this year to $850 million, up from a$664 million investment last year.

The company’s year-end total reserves increased to a record4,074 Bcfe. Proved reserve additions in 1999 were 979 Bcfe at anaverage cost of $0.71/Mcf. Most of the new reserves — 155% ofreserve replacement or 828 Bcfe — came from Vastar’s own effortsat a finding cost of $0.77/Mcfe. Acquisitions resulted in theaddition of 151 Bcfe, while 72 Bcfe were divested.

An area of particular focus this year will be the 23 offshoreproperties acquired from Mobil in 1998, on which hundreds ofdevelopment opportunities have been identified. On the explorationside Vastar plans to participate in four to six deepwater wells andapproximately 40 shelf exploratory and extension wells.

©Copyright 2000 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.