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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Bazmataz who wrote (19916)	4/21/1998 9:12:00 PM
From: Broken_Clock	Respond to of 95453

May lower E & P budget next year IF oil doesn't recover....BUT NOT deepwater!http://biz.yahoo.com/finance/980421/oil_enterp_1.html Tuesday April 21, 8:25 pm Eastern Time INTERVIEW-Enterprise slices oil exploration budget By Margaret Orgill LONDON, April 21 (Reuters) - Britain's leading independent oil explorer Enterprise Oil Plc (quote from Yahoo! UK & Ireland: ETP.L) said on Tuesday that low crude prices were likely to force it to trim its exploration budget for 1998 by about nine percent. Enterprise exploration director Andrew Armour told Reuters in an interview that company plans for annual exploration expenditure this year of 170 million pounds were likely to be sliced by between 10 million and 20 million pounds. Armour acknowledged that low oil prices had hit company income but said the long-term nature of exploration projects made it hard to cut budgets immediately. ''The fact our income is much lower than anticipated, as it is for all our partners, doesn't feed through in the short term. Our plan for this year is by and large unaffected,'' he said. ''But we are trying to do what we can to slow things down and deferring other things into following years.'' The company was postponing some smaller, less attractive projects including a well to be drilled in waters west of the Shetland Islands, he said. Enterprise's exploration budget for 1998 was based on an average oil price of between $15 and $18 a barrel. Benchmark Brent crude so far has averaged $14.50 a barrel on the London futures market. Enterprise has suffered from low oil prices more than integrated oil majors which have softened the blow with profits from refining and marketing. World oil prices slumped to a nine-year low below $12 a barrel for Brent in March in a market hit by oversupply and a slowdown in demand as a result of Asia's currency crisis. Enterprise shares dipped 10 pence before recovering to stand up 6p at 536p in late trade. If oil prices failed to improve this year, then the company might be forced to cut its exploration budget to between 130 million and 140 million stg for next year, said Armour. He said Enterprise production would stay flat this year at around 226,000 barrels a day (bpd), rising to around 300,000 bpd by 2000 on the basis of current reserves. ''If there are more discoveries, then we could be looking at between 350,000 and 400,000 barrels a day by 2005,'' he said. Enterprise expected to spend between $70 million and $100 million in 1998 on projects in the Gulf of Mexico where the firm made its first commercial discovery last year. The company hoped for sizeable reserves from its share of the deepwater Gulf of Mexico Llano concession, Armour said. Armour said the company was also planning to move into Brazil and was in discussions with the government to acquire an exploration permit for deepwater acreage. In Norway, one of the firm's core production areas, test results were expected next month from the Donatello concession where Enterprise owns a 25 percent stake. The company has recently acquired a 40 percent shareholding in a block between Donatello and the nearby Norne field which started pumping oil recently. Enterprise expected its Norwegian crude output to rise to 100,000 barrels a day by 2000 from 40,000 in 1997 with output boosted by the start-up of the Jotun field in late 1999.