This stock isn't staying at 2 15/16 very long.
Thursday, June 1, 2000 09:30 AM
HOUSTON, June 1 /PRNewswire/ -- Esenjay Exploration, Inc. (Nasdaq: ESNJ)
announced today its drilling results for 2000 year-to-date. Of the 19 wells
drilling or logged in 2000, six are currently drilling, one is completing, one
is waiting on pipeline, three are producing and eight were dry holes. Esenjay
plans to commence drilling operations on up to an additional 30 wells before
year-end.
Esenjay also reported its current net daily production is 15.1 million
cubic feet of gas (MMcfg) and 463 barrels of oil (BO) per day (approximately
18 million cubic feet of gas equivalent). This production rate takes into
account the partial sale of working interests and production in the
Raymondville Field (Frio Trend) as well the loss of production from the
company's interest in the Holland #1 well (Hackberry Trend).
Esenjay's Capital Expenditure Budget for 2000 is $26 million of which
$18 million is budgeted for drilling and completion with the remaining
$8 million budgeted for acreage and new 3-D seismic acquisition. The Company
expects to substantially fund this budget from a combination of existing cash
resources, operating cash flow, and credit availability from its facility with
Deutsche Bank, A.G. Additionally, the Company intends to supplement these
cash sources through its continued plan of sharing risk with industry partners
through partial interest sell downs in its exploration projects.
A brief discussion of activity within the company's four major geologic
trends is as follows:
Hackberry Embayment
In the Hackberry Embayment, Esenjay has six 3-D seismic surveys covering
approximately 275 square miles. The Hackberry Embayment is located near the
Gulf coast and the Texas/Louisiana border, and has proven to be an excellent
area for the use of 3-D seismic. Prior to using 3-D seismic, exploration for
the Hackberry had a low rate of success. However, when successful, the wells
generally generated excellent economic returns. 3-D seismic has been the key
to changing the risk profile in this trend. Esenjay currently has two rigs
running on separate exploratory wells in the Hackberry Trend. Approximately
five additional wells are scheduled as part of the 2000 drilling program. A
new 48 square mile 3-D seismic survey was recently shot, processed, and
interpreted, which will aid in identifying additional drilling opportunities.
Esenjay's principal partners in the trend are Helmerich & Payne (NYSE: HP),
Aspect Resources, and HS Resources (NYSE: HSE).
Early in the second Quarter, Esenjay's Holland #1 well (33 1/3% working
interest) experienced production problems and is currently shut-in pending
further evaluation. The well was producing approximately 2.3 MMcfg per day
and 126 BO per day net to Esenjay prior to shut-in.
Frio Trend
In the Frio Trend, Esenjay has 17 3-D seismic surveys covering
approximately 545 square miles. This trend extends across the Texas Gulf
Coast from the Houston area to the border of Mexico. Esenjay currently has
one well drilling in this trend. Approximately 12 additional wells are
planned for 2000. The 2000 drilling program combines a mix of both
geopressured and normally pressured Frio targets.
Effective January 1, 2000, the Company sold a portion of its working
interest in its Raymondville 3-D Seismic Project located in Willacy County,
Texas for $10,940,000. At the time of the sale, the properties attributable
to the sale were producing approximately 2 MMcfg and 6 BO per day net to
Esenjay (see news release # 00-05 dated March 23, 2000).
In March, 2000 Esenjay purchased a 30% working interest in some minor
production which has additional exploration potential adjoining its Willacy
County, Texas 3-D Seismic Project. This acreage is within the borders of
Esenjay's original 3-D seismic shoot area.
Wilcox Trend
In the Wilcox Trend, Esenjay has seven 3-D seismic surveys covering
approximately 230 square miles. This trend extends through Texas from
Louisiana to Mexico. Production from the Wilcox ranges form the very shallow
to very deep (more than 16,000 feet). Esenjay's focus is on the underexplored
deeper portion of the Wilcox, generally below 10,000 feet, which provides the
Company with ample room to extend its exploration efforts.
Esenjay currently has one well drilling in this trend. Approximately
seven additional wells are planned for 2000. Esenjay's principal partner in
the trend is Ocean Energy, Inc. (NYSE: OEI). Ocean has the right to purchase
50% of the Company's interest in some or all of its undrilled Wilcox
exploration acreage after the drilling of Esenjay's Janssen Smith #1 well,
which is scheduled to spud in June (see news release #99-12 dated October 13,
1999).
In March, Esenjay purchased an additional 9.375% working interest from a
partner in its Mikeska Wilcox 3-D Seismic Project. This acquisition includes
existing production as well as exploration acreage and is not subject to the
Ocean agreement.
Yegua Trend
In the Yegua Trend, Esenjay has six 3-D seismic surveys covering
approximately 420 square miles, including three additional shoots under way or
planned for 2000. The Yegua Trend extends from Allen Parish, Louisiana, to
San Patricio County, Texas, and is generally characterized by structurally and
stratigraphically trapped hydrocarbons, which often appear as seismic
amplitudes. This trend is in its early stages for Esenjay. The Company
currently has one well drilling in the Texas portion of this trend.
Approximately six additional wells are planned for 2000. Helmerich & Payne
has joined Esenjay as a partner in one portion of the trend. Cox & Perkins,
DDD Energy and HS Resources are partners with Esenjay in a different part of
the trend.
Esenjay acquired its Inez 3-D Seismic Project data early this year. Its
first well, the Holzheauser-Dincans Gas Unit #1, a recent Yegua discovery (see
news release # 00-09 dated May 22, 2000), has been connected to pipeline and
is currently producing 7 MMcfg and 144 BO per day with flowing tubing pressure
of 5,100 pounds per square inch through a 14/64" choke.
Esenjay is currently in the field acquiring additional 3-D data in the
Texas portion of the Yegua Trend. The Company has recently acquired new 3-D
data in the Louisiana portion of the trend and is currently processing it.
The Company also said that Hibernia Southcoast Capital of New Orleans
(800-666-9174) has recently initiated coverage on Esenjay.
Esenjay Exploration, Inc. is an independent energy company engaged in the
exploration for and the development of natural gas and oil. It has an
extensive inventory of technology enhanced natural gas exploration projects
located along the Texas and Louisiana onshore gulf coast. It is focused on
the generation and enhancement of these projects utilizing computerized
exploration technologies and 3-D seismic data prior to drilling.
[Cautionary Statement Regarding Forward-Looking Information]
Certain statements contained herein that set forth management's
intentions, plans, beliefs, expectations or predictions of the future are
forward-looking statements. In all cases Esenjay's actual results could
differ materially from those projected in any forward-looking statements. The
risks and uncertainties include, but are not limited to, potential unfavorable
or uncertain results of completion operations, operational uncertainties,
risks associated with quantities of total reserves and rates of production
from new gas and oil reserves and pricing assumptions regarding said reserves,
potential delays in the timing of planned operations, potential cost overruns,
regulatory uncertainties, as well as general industry and market conditions.
Additional information concerning factors that could cause actual results to
vary materially is contained in Esenjay's periodic filings with the U.S.
Securities and Exchange Commission ("SEC"), all of which may be obtained by
contacting Esenjay or the SEC.
SOURCE Esenjay Exploration, Inc.
CONTACT: Investor Relations of Esenjay Exploration, Inc., 713-739-7100
2000, PR Newswire
Jim |
