Jane,
Product will be down this quarter. BSNX has a history of missing their production projections.
Basin Provides Operational Update
DENVER, Jun 5, 2000 /PRNewswire via COMTEX/ -- Basin Exploration, Inc. (Nasdaq:
BSNX) today released the following operational information:
Production
The company estimates that its net production in the second quarter of 2000 will
average between 72 MMcfe and 76 MMcfe per day, compared to approximately 87
MMcfe per day in the first quarter of the year. This estimate reflects actual
performance through a portion of the period and revised expectations for the
timing of initiating production from new wells and recompleting certain other
wells in the Gulf of Mexico. The company continues to project that its
production during the second half of the year will increase significantly. It
anticipates that its net production will reach approximately 100 MMcfe per day
by early in the third quarter and that it will average in excess of 100 MMcfe
per day during the second half of 2000.
The projected decrease in production from the first to the second quarter of
2000 reflects anticipated depletion-related declines, plus smaller-than-
expected contributions from wells on East Cameron Block 2, East Cameron Block
34, East Cameron Block 220, West Delta Block 63 and Vermilion Block 267.
Wells on East Cameron Block 2 and East Cameron Block 34 began producing water
earlier than projected. The well on East Cameron Block 2 has continued to
produce gas at a reduced rate from the same completion interval. The well on
East Cameron Block 34 has been recompleted in a shallower zone for a production
rate comparable to the level maintained prior to the commencement of water
production but the well was off-line for portions of April and May.
As previously reported, the #A-12 discovery well drilled on East Cameron Block
220 in late 1999 produced oil as well as gas when it was initially placed
on-line. As a result, the well was temporarily shut-in since the property's
existing facilities and pipeline connections were not capable of handling oil
production. Subsequently, the well was produced intermittently through test
facilities, but has been shut-in for most of the second quarter to-date. A
workover operation is currently being conducted to seal off the oil sands, after
which the company expects to place the well on sustained production at an
initial gross rate in excess of 10 MMcfe of gas and condensate per day.
Two wells on West Delta Block 63 were initially placed on-line in March 2000
through a nearby production platform that is owned and operated by a third
party. Production has been constrained and periodically has been shut-in due to
inadequate performance of the third-party owned facilities, which are currently
being modified.
The #A-2 well on Vermilion Block 267 (further discussed below) was placed
on-line on May 22, 2000 at an initial gross rate of approximately 7 MMcfe per
day and the rate has gradually been increased to a stabilized level of 20 MMcfe
per day. The #A-1 discovery well on Vermilion Block 267, which was drilled in
the fourth quarter of 1999, was completed and placed on-line on May 31, 2000 at
an initial gross stabilized rate of approximately 15 MMcfe. First production
from Vermilion Block 267 was delayed by several weeks to repair damage to the
platform that occurred during its initial transit from the ~abrication yard.
The company's forecast of higher production in the second half of 2000 is based
on expected increased contributions from East Cameron Block 220, West Delta
Block 63 and Vermilion Block 267, and upon anticipated commencement of
production from several additional successful wells drilled in the Gulf of
Mexico during the past year. Among the new wells expected to come on-line by
early in the third quarter are three wells on West Delta Blocks 58/59, two wells
on South Timbalier Block 143, and one well on West Delta Blocks 121/122.
Drilling Activity
Basin recently participated in drilling six wells in the Gulf of Mexico, of
which five are apparent successes. The unsuccessful well was drilled on West
Cameron Block 164. One successful well was drilled on a flex-trend property in
which the company owns an 8% non-operated working interest. The other four
successful wells, all of which are located on the outer continental shelf, are
described below.
South Timbalier Block 107 -- The OCS-G 15319 #2 exploratory well was drilled to
a true vertical depth of approximately 17,520 feet and logged an estimated 144
net feet of gas/condensate pay in multiple Pliocene-aged sands. Current plans
are to temporarily suspend the well after it is completed, pending installation
of production facilities. First production is expected by early 2001. Basin owns
a 30% working interest in South Timbalier Block 107, which is operated by
Newfield Exploration Company.
Vermilion Block 267 -- The OCS-G 17913 #A-2 test well was drilled to a true
vertical depth of approximately 11,300 feet and logged in excess of 80 net feet
of gas/condensate pay in a Pliocene-aged sand. The drilling rig on location
recently spudded a third well on the property after completing the #A-1 well.
Basin operates Vermilion Block 267 with a 40% working interest. Chieftain
International, Inc. owns the remaining 60%.
West Delta Block 58 -- The OCS-G 0146 #D-6 exploratory well was drilled to an
intermediate TVD of approximately 11,500 feet and logged in excess of 300 net
feet of gas/condensate pay in multiple Miocene-aged sands. The company plans to
sidetrack the bottom of the well from a TVD of approximately 10,400 feet, due to
a stuck logging tool, and then to set casing and deepen the well to evaluate
several additional primary-objective sand targets. Basin anticipates completing
the well and tying it in to existing third More -party owned production
facilities on the block, with initial production expected during the third
quarter of this year. Basin owns a 75% working interest in the #D-6 well down to
a subsea TVD of 11,300 feet and a 37.5% working interest below that depth. Other
working interest owners in the well include Duke Energy Hydrocarbons, LLC,
Energy Development Corporation, and Entech Enterprises, Inc.
West Delta Block 121/122 -- The OCS-G 13645 #A-4 well on West Delta Block 122
was drilled to a true vertical depth of approximately 9,795 feet and logged an
estimated 140 net feet of oil and gas pay in Pliocene-aged sands. The well is
currently being completed for immediate production through existing facilities
on the block. The rig will next be used to drill the #A-6 exploratory well on
West Delta Block 121. Basin owns a 25% working interest in West Delta Blocks 121
and 122, in association with the operator, Vastar Resources, Inc. (51%), and
Santa Fe Snyder Corporation (24%).
Year-to-date, Basin has participated in 11 Gulf of Mexico wells, including 9
apparent successes. Currently, the company is participating in drilling four
wells, including the #A-3 well on Vermilion Block 267, the continuation of the
#D-6 well on West Delta Block 58, the #1 well on West Cameron Block 287, and the
#A-5ST well on Vermilion Block 329. Basin also plans to participate in wells
scheduled to be spudded during the next 60 days on South Marsh Island Block 235,
West Delta Block 49, and West Delta Blocks 121/122. For the full year in 2000,
the company anticipates participating in approximately 25 wells in the Gulf of
Mexico. Basin currently owns interests in 28 properties in the Gulf with proved
oil and gas reserves, five of which are under development for initial
production.
Lease Awards
As previously reported, Basin submitted apparent high bids for ten offshore
lease blocks at the federal Central Gulf of Mexico Lease Sale No. 175, which was
held on March 15, 2000. The Minerals Management Service subsequently awarded the
company all ten of the leases, covering 100% working interests in the following
properties:
East Cameron Block 45 South Pass Block 38
East Cameron Block 178 Vermilion Block 39
Eugene Island Block 99 Vermilion Block 71
Ship Shoal Block 104 West Cameron Block 252
South Marsh Island Block 234 West Cameron Block 332
Basin Exploration, Inc. is engaged in the exploration, acquisition, development
and exploitation of oil and gas properties in the United States, both onshore
and in the Gulf of Mexico. The company's securities are traded on the Nasdaq
stock market under the symbol BSNX.
Certain statements in this news release regarding projected future results or
anticipated activities, including projected development and future production,
are "forward-looking statements" within the meaning of the federal securities
laws. Such statements are inherently uncertain and actual results and activities
may differ from those projected. Certain factors that can affect projected
future events and results are described in Basin's Annual Report on Form 10-K,
filed with the Securities and Exchange Commission on March 29, 2000. Such
factors include, among others, uncertainties inherent in reserve and production
estimations, mechanical and operational risks inherent in oil and gas
exploration and production activities, the concentration of a significant
portion of the company's production in a relatively small number of offshore
properties, the uncertain availability of equipment and personnel, and the
company's inability to control operations on properties that it does not
operate. The company has no obligation to update the statements contained in
this news release or to take actions described herein or otherwise presently
planned.
SOURCE Basin Exploration, Inc. |
