Vastar Resources replaced 215% of its 1998 production with newreserves, its highest-ever reserve replacement rate. Provedreserves additions totaled 1,052 Bcfe, or 1,023 Bcfe inclusive ofdivestitures. Year-end total reserves were a record 3,700 Bcfe, up17% over the year-end 1997 base. Average reserve replacement costs,including acquisitions, were $1.11/Mcfe.

Exclusive of acquisitions and divestitures, Vastar achieved 134%reserve replacement, another company record. Vastar’s exploration,exploitation and development efforts added 638 Bcfe of new reservesat a cost of $1.10/Mcfe, with significant drilling successesachieved in the Gulf of Mexico shelf, deep-water and onshoreprograms. Acquisitions contributed 414 Bcfe of reserves, primarilyin the shelf and Arkoma basin areas.

“Our success confirms the ability of our core areas to drivenear-term growth while we are exploring the outstanding potentialwe see in the deep-water Gulf of Mexico,” said Charles D. Davidson,CEO. “Furthermore, we believe our finding costs are verycompetitive given our domestic focus and high activity level in theGulf Shelf.” Contributing to the results was a 57% exploratorydrilling success rate, 50% offshore and 61% onshore.

Vastar also announced a $695 million 1999 base capitalinvestment budget that essentially matches the $696 million in basecapital investments made during 1998. In addition, the companyspent $437 million on a major Gulf of Mexico acquisition during1998. The 1999 budget is divided between programs that drivenear-term growth from Vastar’s existing onshore and Gulf of Mexicoshelf core areas, and the high-potential Gulf of Mexico deep-waterprogram that is expected to drive long-term growth.

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