Nice jump in PV-10 value at the end of 1999, plus an update on Raton NG. I'm looking for a nice jump tomorrow!
HUTCHINSON, Kan., Feb. 22 /PRNewswire/ -- Petroglyph Energy, Inc. (Nasdaq: PGEI - news) today announced that the Company's total proved oil and gas reserves as of December 31, 1999, were 18.5 million barrels of crude oil and 43.4 billion cubic feet of natural gas, or 25.7 million barrels equivalent of crude oil. This represents a 186% increase over the Company's total proved oil and gas reserves as of December 31, 1998, of 9.0 million barrels equivalent of crude oil.
The present value, using a 10% discount rate (``PV-10') of the future net cash flows before income taxes of the Company's December 31, 1999 reserves is $151.3 million, using realized prices of $22.37 per barrel of oil and $1.99 per thousand cubic feet of natural gas. This represents a 442% increase over the Company's PV-10 of total proved reserves as of December 31, 1998, of $27.9 million.
The Company's proved developed oil and gas reserves as of December 31, 1999 were 14.5 million barrels equivalent of crude oil, representing a 95% increase over the same category of reserves as of December 31, 1998.
The Company's proved developed producing oil and gas reserves as of December 31, 1999, were 2.6 million barrels equivalent of crude oil, representing a 54% increase over the same category of reserves as of December 31, 1998.
The Company spent approximately $9.5 million on reserve development activities during 1999, including the acquisition of the remaining 50% working interest in the Antelope Creek Field for $6.9 million, compared with $17.5 million spent on reserve development activities during 1998.
During 2000, the Company plans to spend approximately $8.5 million developing its oil and gas reserves in Utah, including issuing $2.5 million in preferred stock for the acquisition of proved developed producing oil and gas properties from III Exploration Company, an affiliate of the Company. The Company plans to spend, subject to available financing, approximately $6.0 million on continued waterflood development activities in the Antelope Creek Field. The Company expects the capital spending to result in enhanced cash flow and believes that it will exit 2000 with a 50% increase in its Antelope Creek daily oil production compared to December 1999 levels.
The Company's December 31, 1999 total proved oil and gas reserves include no gas reserves from its Raton Basin coalbed methane project. Although the Company believes it has discovered a significant commercial gas resource in its Raton Basin project, its gas reserves in the pilot area are currently classified as probable reserves, pending a dewatering period sufficient to result in the production of commercial levels of gas from individual wells within the pilot development area. During 1999, the Company produced a total of approximately 12 million barrels of water and continuously produced measurable volumes of natural gas along with the water from the production wells in the pilot development area. These measurable gas volumes are supplying a portion of the fuel gas required for field operations in the pilot area, but no gas volumes are currently large enough to be sold to markets via the gas pipelines connected to the pilot area.
Initially the Company estimated that it would take approximately 6 to 12 months to sufficiently dewater the coal gas reservoirs and bring about commercial volumes of gas production in the pilot area. However, greater than anticipated water production from wells in the pilot area significantly extended the estimated amount of time necessary to achieve gas production in commercial quantities. As a result of the higher than anticipated water volumes, the Company conducted a series of specialized production tests during December 1999. These tests were designed, among other things, to further estimate the additional time required to dewater the coal gas reservoirs in the pilot area at the current water withdrawal rate. As a result of this engineering evaluation, the Company determined that approximately 10 additional water withdrawal wells could be drilled in relation to the pilot area to remove additional water and enable the coal formations to begin to produce gas in commercial quantities.
Based on its experience to date, the Company believes that the coal gas reservoirs within the pilot area, and more generally within the majority of its entire acreage position in the Raton Basin, contain commercial quantities of coalbed methane gas. During 2000, and subject to securing the necessary financing, the Company plans to continue aggressively developing its Raton Basin coal gas resource.
Petroglyph Energy, Inc. is an independent energy company located in Hutchinson, Kansas engaged in the exploration, development and acquisition of oil and gas properties. Petroglyph's properties are concentrated in Utah and Colorado. Information is also available on the Company's web site at www.pgei.com. |
