TMR now selling for 1.3 times last years CF, and 1.1 times this years annualized CF.
How low can it go?
Almost bought some today when is was down another 10%.
THE MERIDIAN RESOURCE CORPORATION ANNOUNCES SUCCESSFUL DRILLING
OPERATIONS/INCREASES IN PRODUCTION VOLUMES
Houston, Texas - September 20, 2001 - The Meridian Resource Corporation
(NYSE: TMR) today announced that new production from recent discoveries has
increased the Company's daily production volumes to its net interest by
11.6 million cubic feet of natural gas per day on an equivalency basis
(Mmcfe/d), which equates to an increase over 10% in net daily production.
PRODUCTION INCREASES
After adding perforations to the Camerina 2 sand formation at the Company's
Lakeside SL 15223 #1 well, Lakeside field, Cameron Parish, Louisiana,
initial test rates increased nearly three-fold to 15.1 Mmcf/d and 280 BOPD.
The well was returned to production and is currently producing at 12.8
Mmcf/d and 233 BOPD with a flowing tubing pressure (ftp) of 11,000 pounds
per square inch (psi) and a drawdown of less than 4%. Meridian operates
the well and holds a working interest of approximately 65% and a net
revenue interest of 46%. The Company is currently drilling the Lakeside SL
15223 #2 well and, depending on the success of that well, anticipates
drilling additional wells in this prospect area beginning in March 2002
after the Lacassine Refuge re-opens for drilling operations.
Additionally, the Company reported the successful drilling operations at
four in-field wells; the Southdown Sugar #3 ST well in the Gibson field;
the Addison 28-1 well in the Thornwell field; the CL&F 62 well in the
Turtle Bayou field; and, the SL 16273 #1 well at the Olive prospect in Main
Pass. Three of the four completions have been placed on production at
total rates of 17.8 Mmcf/d and 599 BOPD gross, 4.4 Mmcf/d and 126 BOPD,
net.
Combined with the additional production from the Lakeside SL 15223 #1 well,
recent drilling operations, have added a total of 30.6 Mmcf/d and 832 BOPD,
gross, and a net of 10.2 Mmcf/d and 233 BOPD, or 11.6 Mmcfe/d in new net
daily production volumes.
The Southdown Sugar #3 well, Gibson field, Terrebonne Parish, Louisiana,
was completed in the EE-6 sand and is currently producing at a daily flow
rate of 7 Mmcf/d and 200 BOPD. Meridian owns a 32% working interest and a
net revenue interest of approximately 28.4%.
The Addison 28-1 well, Thornwell field, Jefferson Davis Parish, Louisiana,
has been completed and is producing at a daily flow rate of approximately
10 Mmcf/d and 399 BOPD. This marks the fourteenth successful completion in
this highly prolific Thornwell field. Meridian was the operator of the
drilling of this well and holds a working interest of approximately 26.1%
and a net revenue interest of 17.4%.
The CL & F 62 well, Gibson field, Terrebon Parish, Louisiana, was a lease
obligation well and was placed on production at a daily flow rate of
approximately 800 Mcf/d from the shallow myocene sand at approximately
4,600 feet. Meridian holds a 97% working interest and a 81% net revenue
interest in the well and is the operator of the Gibson field, which was
purchased from Shell Oil in 1998.
DRILLING OPERATIONS
In other operations, the Company announced that it has completed the
sidetrack operations on its Hughes #1 well, East Lake Arthur field,
Jefferson Davis Parish, Louisiana, and is preparing the well for completion
in the lower Bol Mex 5 sand package. Electric logging operations have
confirmed the original reports on the discovery well. It is anticipated
that, barring no unusual circumstances, the well will be placed on
production during October. Meridian is the operator and holds a 90%
working interest and a 65.5% net revenue interest in the Hughes #1 well.
The Company holds leases over approximately 2,300 acres in this highly
prospective area. Additional wells in this area are anticipated to be
drilled to develop the Bol Mex sands beginning in late 2001 or early 2002.
The Lakeside SL 15223 #2 well, Cameron Parish, Louisiana, resumed drilling
operations and is currently drilling below 14,404 feet with a total depth
of 17,409 feet. Targeted sands include the highly prolific Marg Howei
sands, the Camerina sands and the Miogyp sands. An extension was granted
by the Lacassine Refuge for Meridian to drill through October 31, 2001 or
for an additional month to complete this well. Meridian holds a 65.5%
working interest and 46% net revenue interest in the field and is the
operator.
The Williams Land Company #1 well in the SW Donner prospect area of the
North Turtle Bayou/South Ramos field is currently drilling below 18,000
feet to test the Operc sands. Target depth is 18,500 feet. Two recent
development/exploitation wells, the Avoca 25-2 and the Avoca 47-2 wells,
encountered the major down-thrown fault in an unfavorable structural
position relative to the seismic and subsurface interpretations and are
being evaluated by the Company for further drilling during 2002. Meridian
is the operator of the field and owns a 90% working interest and a 61.8%
net revenue interest in the well.
The Avoca #1 well, a farmout in the Company's North Turtle Bayou/Ramos
field, Assumption Parish, Louisiana, has been evaluated with electric
logging
operations with apparent pay in multiple sands. Although a unit has not
been established as of this date, based on internal estimates Meridian will
own an approximate carried working interest of 74% in the sands of
interest.
The East Hagler Unit #1 well, Dickinson Prospect, Galveston County, Texas,
is currently drilling at 13,833 feet. If successful, this Vicksburg play
will establish additional drilling opportunities for the Company in this
area during 2002. Meridian is the operator of the prospect and holds
approximately 72% working interest and 51% net revenue interest.
Joseph A. Reeves, Jr., Chairman and CEO, noted, "We are pleased with the
increases in reserves and production volumes as we continue the process of
growing and replacing reserves produced, as well as those sold during the
course of the recent months. As stated earlier this year, Meridian is
committed to drilling deep, pressured exploration prospects in the domestic
United States south Louisiana and Texas Gulf Coast region. Because of the
nature of wetlands environment and the highly faulted, geo-pressured
subsurface at depth, risks are high as can be the rewards. We continuously
micro-manage and refine the processes to improve our results. We are
pleased with the technical and professional additions to our staff that we
believe will further improve this process. The Hughes, Lakeside and
similar exploration discoveries made this year are representative of the
style and quality of prospects in the Company's exploration inventory.
Other similar opportunities are currently drilling as reported above, the
results of which will be announced as known to the Company.
The recent events in New York have had a tremendous impact on the families
and loved ones lost in that horrible act of terrorism against America. Our
heartfelt prayers go out for those touched by this tragedy. As a result of
these events, the national and world economy has been directly affected,
resulting in reduced commodity prices, expected cash flows, and common
stock prices for the upstream sector of the oil and gas industry.
During the course of the last eighteen months, in an environment of higher
commodity prices and cash flows, Meridian reorganized the financial and
capital structure of the Company, improving its financial condition by
selling high-cost, low upside properties, and using the proceeds plus
excess cash flow to reduce debt, buy back the Shell Preferred Stock at then
low prices, and reduce overall cost of operations. We are committed to
reduce the Company's leverage, increase reserves and daily production rates
in a prudent and disciplined manner. Depending on the normal and customary
risk associated with our industry, such as those set out herein below, the
Company expects to have an annual cash flow for 2001 of approximately $2.00
per fully diluted common share. It is also anticipated that daily
production rates will continue to increase through yearend. We will spend
only within our cash flow, drilling those wells which will provide the best
opportunity to enhance the growth of Meridian and shareholder value at the
least cost per unit volume of reserves and production."
Certain of the foregoing statements may be deemed "forward-looking
statements" within the meaning of the Securities Exchange Act of 1934.
Although Meridian believes that the expectations reflected in such
forward-looking statements are reasonable, these statements involve risks
and uncertainties that may cause actual future activities and results to be
materially different from those suggested or described in this press
release. These include risks inherent in the drilling of oil and natural
gas wells, including risks of fire, explosion, blowout, pipe failure,
casing collapse, unusual or unexpected formation pressures, environmental
hazards and other operating and production risks inherent in oil and
natural gas drilling and production activities, which may temporarily or
permanently reduce production or cause initial production or test results
to not be indicative of future well performance, or delay the timing of
sales or completion of drilling operations. Other risks exist with respect
to oil and natural gas prices, a material decline in which could cause the
Company to delay or suspend planned drilling operations or reduce
production levels, and risks relating to the availability of capital to
fund drilling operations that can be adversely affected by adverse drilling
results, production declines and declines in oil and gas prices.
These and other risks are described in the Company's documents and reports
that are available from the U.S. Securities and Exchange Commission,
including the report filed on Form 10-K for the year ended December 31,
2000, and the report filed on Form 10-Q for the quarter ended June 30,
2001.
The Meridian Resource Corporation is an independent oil and natural gas
company engaged in the exploration for and development of oil and natural
gas in south Louisiana, southeast Texas, and the Gulf of Mexico. Meridian
has access to an extensive inventory of seismic data and, among independent
producers, is a leader in using 3-D seismic technology to analyze
prospects, define risk, and target high-potential wells for exploration and
development. Meridian is headquartered in Houston, Texas, and has a field
office in Weeks Island, Louisiana. Meridian stock is traded on the New
York Stock Exchange under the symbol "TMR." -### -
FOR MORE INFORMATION CONTACT:
Joseph A. Reeves, Jr., Michael J. Mayell, or James H. Shonsey at (281)
-597-7000
Meridian Resource Corporation Website: www.tmrc.com |
