Kelley Oil plans higher spending
HOUSTON, Jan 9 (Reuters) - Kelley Oil & Gas Corp said Friday its initial capital expenditure
budget for 1998 is $62 million, compared with the initial 1997 capital expenditure budget of $38
million which was subsequently amended to $52 million.
The company said the 1998 budget is allocated evenly between development and exploration.
Noting most financial resources in 1996 and 1997 were devoted to development drilling in north
Louisiana, chief executive John Bookout said improvements in cash flow permit increases in
exploration activities in 1998.
Bookout said the increased activity will be primarily focused on south Louisiana, including prospects
acquired from SCANA Corp (NYSE:SCG - news). The plans balance continued development in
north Louisiana with higher risk exploration that has the potential to add significant reserves, he said.
The company said its 1998 exploration budget of $31 million is allocated among south Louisiana, the
shallow waters of the Gulf of Mexico, Texas and New Mexico.
This includes a prospect in the shallow waters of the Gulf of Mexico at Matagorda Island Blocks
619/620 offshore Texas, where Kelley holds a 100 percent working interest.
The company said it may seek an industry partner in this offshore prospect, where it plans to start
drilling in the first quarter.
The company said it budgeted $18 million for participation in the drilling of prospects in south
Louisiana, adding 20 prospects have been identified which vary in depth and cost. The number of
south Louisiana prospects drilled in 1998 will depend upon, among other things, the working
interests retained by the company, which typically will not exceed 50 percent, it said.
The 1998 development budget of $31 million provides for the drilling of 44 gross (21.0 net) wells in
north Louisiana, where the company believes it has at least a two year inventory of economic drill
sites at this pace, it said.
Of 78 gross (33.3 net) development wells drilled in 1997 in north Louisiana, 71 gross (29.3 net)
have been completed as producers and seven gross wells (4.0 net) are currently in progress, Kelley
Oil said.
The 1998 development budget also provides for several recompletions and other proved
undeveloped locations, some of which are on properties recently acquired from SCANA.
More Quotes
and News:
Kelley Oil & Gas Corp (Nasdaq:KOGC - news)
Scana Corp (NYSE:SCG - news)
Related News Categories: oil/energy, utilities |
