Stone Energy Corporation Announces Fourth Quarter 1999 Production Interruptions.
Stone Energy Corporation (NYSE:SGY) today announced that its fourth quarter 1999 production volumes will be less than originally expected principally due to three planned events and two unexpected events that were beyond the Company's control. The fields with production interruptions were South Pelto Block 23, East Cameron Block 64 and Vermilion Block 255.
During the fourth quarter of 1999, the Company interrupted production on three properties to connect new discovery wells to existing facilities, as well as to upgrade production facilities to accommodate new or anticipated increases in production. In each instance, the duration of interruption exceeded what was planned due to equipment and weather delays and increases in the scope of the required work. In addition to the planned interruptions, damage to third party pipelines on two separate properties resulted in production shut-ins that were not anticipated and were beyond the control of the Company.
Due principally to the combined effect of the deferral of anticipated production from these interruptions, the Company's average net daily production rate for October and November 1999 was approximately 139.3 Mmcfe from approximately 8.0 thousand barrels of oil and condensate and 91.6 Mmcf of gas. The Company does not believe there has been any loss of production capacity or reserves associated with these events. Once full production has been restored, the Company estimates that its net daily production rate from wells completed and connected will be approximately 164.7 Mmcfe from approximately 9.2 thousand barrels of oil and condensate and 109.5 Mmcf of gas. This estimate does not include anticipated production from the OCS-G 0775 No. 19 Well on the Vermilion Block 131 Field, which has been delayed due to weather conditions but is expected to be placed on production later this month. The No. 19 Well had previously tested at a net daily rate of 2.0 Mmcf of gas and 40 barrels of condensate.
The planned interruptions included work on the South Pelto Block 23 Field. In connection with the hookup of the 1999 Triggerfish discovery, production from the C and CA platforms was shut-in to install new production vessels and crew quarters on the CA platform as well as to structurally upgrade the platform that handles much of the oil production from the field. The work was more extensive than anticipated and required a shut-in period three weeks longer than planned.
A second planned interruption was on the East Cameron Block 64 Field, where the Company acquired an additional interest and control of operations in 1999. In connection with the Company's development plans for East Cameron Block 64 and the adjacent West Cameron Block 176, it was decided to shut-in production from the field's central gathering and producing facility, the A Platform, for modernization and repairs. This work was timed to add production capacity to accommodate recent workover successes and drilling activities planned for the first quarter of 2000. The work on the A Platform resulted in the shut-in of the East Cameron Block 64 producing wells for a period of three weeks.
A third planned interruption was associated with hooking up a new discovery on the Company's Vermilion Block 255 Field. To process production from the 1999 Pylos discovery well, the Company connected the well by flowline to the G Platform, which handles much of the field oil production. In connection with the hookup of the Pylos discovery, it was decided that the producing facilities for the G Platform should be upgraded to include additional production handling equipment and capacity to accommodate new wells planned for drilling during 2000. This construction at the G Platform and certain weather delays associated with the installation of the Pylos platform and pipeline hookup resulted in the shut-in of the related producing wells for one week.
In addition to these planned interruptions, two events occurred that were beyond the Company's control. On November 26, 1999, production resumed from the Company's South Pelto Block 23 CA Platform at the average daily rate of 7.1 Mmcfe, including first production from the Triggerfish Prospect discovery well. On November 28, 1999, a third party's downstream oil pipeline was ruptured, necessitating a shut-in of the CA Platform. Production was restored on December 7, 1999.
On November 30, 1999, production was initiated from the Vermilion Block 255 Field Pylos discovery well at the net daily rate of 9.4 Mmcfe. On December 3, 1999, a well control problem on a third party production facility caused the shut-in of the oil sales line from the field. The Company's net daily production from the shut-in line had been approximately 23.5 Mmcfe. On December 7, 1999, production from the Pylos well was rerouted to an alternate gas pipeline system and placed back on production. The third party operator of the sales line has advised the Company that it expects full production to be restored during the next seven days.
Stone Energy is an independent oil and gas company headquartered in Lafayette, Louisiana, and is engaged in the acquisition, exploitation and operation of oil and gas properties located in the Gulf Coast Basin.
For additional information, contact James H. Prince, Chief Financial Officer at 337/237-0410-phone, 337/237-0426-fax or via e-mail at firstname.lastname@example.org.
Certain statements in this press release are forward-looking and are based upon the Company's current belief as to the outcome and timing of future events. All statements other than statements of historical facts included herein regarding budgeted capital expenditures, oil and gas production, the Company's business strategy and other plans and objectives for future operations are forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include the timing and extent of changes in commodity prices for oil and gas, operating risks and other risk factors as described in the Company's Annual Report on Form 10-K as filed with the Securities and Exchange Commission. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, the Company's actual results and plans could differ materially from those expressed in the forward-looking statements.
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|Date:||Dec 10, 1999|
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