Vintage Petroleum's Third Quarter 2003 Operations Update
November 05 2003 - 5:12PM
PR Newswire (US)
Vintage Petroleum's Third Quarter 2003 Operations Update TULSA,
Okla., Nov. 5 /PRNewswire-FirstCall/ -- Vintage Petroleum, Inc.
today updated its operational activities and plans for 2003. During
the third quarter, $50 million of the company's 2003 planned non-
acquisition capital budget of $185 million was spent drilling a
total of 37 gross (33.0 net) wells and performing 56 workovers. The
company is on track to drill approximately 130 net wells and
undertake a variety of lower-risk exploitation projects with
approximately 70 percent of the budget during 2003. The remaining
30 percent of the budget continues to be allocated primarily to
potentially higher-impact exploration programs in the United
States, Canada and Yemen. United States Exploitation During the
quarter, five gross (four net) exploitation wells were drilled with
an 86 percent success rate. Year to date, 23 gross (20.0 net) wells
have been drilled with an 85 percent success rate and 96 workovers
have been performed. Exploitation drilling in the Gilmer and Loma
Blanca Fields in Texas and the Strong City Field in Oklahoma
resulted in three gross (2.5 net) wells with an initial production
buildup of 5.6 million cubic feet of gas and 200 barrels of oil per
day net to Vintage's interest. High angle drilling of one gross
(one net) well in the Pleito Ranch Field in California developed an
initial net production buildup of 260 barrels of oil and 100
thousand cubic feet of gas per day. The 2003 U.S. exploitation
program budgeted at $49 million is on track to drill a total of 35
gross (29 net) wells by year-end. Vintage is drilling a replacement
well for its Galveston Bay State Tract 65-2 well lost due to
mechanical reasons and will drill approximately five horizontal oil
wells during the fourth quarter in the Darst Creek field as well as
test a high-angle drilling concept in the San Miguelito field in
California. Additionally, several tight gas wells are planned in
the Gilmer and Terryville fields in Texas and Louisiana. Based on
the results of these various exploitation drilling programs,
several additional future drilling locations could be generated in
these fields. Exploration Vintage has secured an interest in over
19,500 gross acres in the Permian basin encompassing three,
multi-well exploration prospects targeting known tight carbonate
gas reservoirs. These prospects are predicated on an established
play concept which utilizes horizontal drilling and fracture
stimulation technology to significantly improve production and
economics over the historical results obtained utilizing vertical
wellbores. The first exploration well in the Austin prospect in Lea
County, New Mexico, the Hannah 17 State #2-H, targets the
Mississippian formation and casing has been set at a measured depth
of 16,428 feet, which includes the 3,100 foot horizontal section.
The fracture stimulation of the horizontal section is scheduled for
early November, and if successful, several additional wells could
be drilled on this prospect. The first exploration well on the
Rosehill prospect, the Wilbanks 53 #2-H, in Martin County, Texas,
targets the Mississippian formation as well. The well has been
drilled to a depth of 10,550 feet and casing has been set. Drilling
is proceeding on a 4,000 foot horizontal section and is expected to
take approximately 30 days. Vintage has a 100 percent working
interest in both the Rosehill and Austin wells. Earlier this year,
Vintage participated in the Muleskinner #1 well in the Leatherwood
prospect with a 33 percent working interest. This well was a
horizontal Devonian test in Terrell County, Texas, drilled to a
total depth of 17,931 feet, which included a 2,750 foot horizontal
section. Three separate fracture stimulations were performed in the
horizontal section and the well currently has sustained production
of 1.1 million cubic feet of gas per day gross (261 thousand cubic
feet of gas per day net). Pending further technical evaluation,
additional wells may be drilled in this prospect. Vintage is
pursuing company-generated Oligocene and Miocene prospects in the
Texas Gulf Coast based on 3-D seismic and geochemical surveys.
Within these targeted play concepts Vintage has acquired five Texas
state leases covering three shallow water prospects. The first
exploration well to be drilled on one of the Texas Gulf Coast
exploration plays is located on the Tres prospect which is based on
a Miocene gas exploration target coupled with the redevelopment of
additional Miocene oil and gas sands. In November, Vintage will
begin drilling the first of two wells planned for the fourth
quarter to an approximate depth of 8,200 feet. Vintage will operate
these wells and has a 65 percent working interest in this prospect;
and if successful, production could commence as early as mid-year
2004. The total net unrisked reserve potential on the Tres prospect
is 15 Bcfe. Argentina Twenty-one gross (20.4 net) exploitation
wells were drilled on several concessions in the San Jorge Basin
and the Cuyo Basin during the third quarter with a success rate of
100 percent. In addition, 16 workovers were performed during the
third quarter. Four drilling rigs and six workover rigs were
running during the third quarter. Forty-six gross (44.8 net) wells
have been drilled and 55 workovers have been performed
year-to-date. Vintage plans to drill 70 gross (68.8 net) wells this
year. 3-D seismic covering nearly 36,000 acres is scheduled during
the fourth quarter on the Canadon Leon concession. Canada Vintage
has drilled 25 gross (16.0 net) exploitation and exploration wells
with an 81 percent success rate year-to-date. For the year, Vintage
plans to drill approximately 40 gross (25.0 net) exploitation and
exploration wells with activity occurring in the Sturgeon Lake,
West Central and Peace River Arch areas of Alberta and the
foothills trend in northeastern British Columbia. During the third
quarter, exploitation drilling in the Sturgeon Lake and West
Central areas added 1.5 million cubic feet of gas per day and 175
barrels of oil per day of stabilized production. Exploration
activity continued in the Cypress area located in the foothills
trend of northeastern British Columbia. The first well, a 5,210
foot Triassic test, has been drilled and cased with completion
operations underway. One additional Triassic well is planned during
the fourth quarter. Vintage will have a 40 percent, non-operated
interest in this prospect. In the same prospect area, Vintage will
spud an 8,940 foot Mississippian test during November. Vintage will
operate this well and participate with a 60 percent working
interest. Prospect size for the targeted plays range from 20 to 150
Bcfe. Vintage's net unrisked reserve potential for this program is
approximately 90 Bcfe. During 2003, Vintage and its partners have
acquired 9,800 net (23,800 gross) acres in the prospect area
located near marketing infrastructure. During early 2003, Vintage
entered an agreement to conduct exploration activities as operator
on four onshore blocks in the province of Nova Scotia, Canada.
Vintage drilled the Beech Hill # 1 prospect located in the
Antigonish block to a total depth of 3,425 feet targeting potential
oil accumulations in a Carboniferous Age reef. At this location,
the well did not encounter reservoir quality formations and was
subsequently abandoned. With the drilling of the well, Vintage has
earned an 80 percent working interest in the Antigonish block.
During the third quarter, the company acquired 46 miles of 2-D
seismic and conducted a geochemical survey on the Bras d'Or, Sydney
and Pictou blocks. Vintage has the opportunity to earn 75 percent
working interest in the Bras d'Or, Sydney and Pictou blocks and,
depending on the evaluation of the acquired geological information,
may elect to acquire additional seismic data or proceed with the
drilling of wells on these blocks. The Antigonish, Bras d'Or,
Sydney and Pictou blocks cover approximately 1.5 million gross
acres. Vintage to Webcast Conference Call The company's third
quarter 2003 conference call to review third quarter results and
future plans will be broadcast live on a listen-only basis over the
internet on Thursday, November 6, at 3 p.m. Central time.
Interested parties may access the webcast by visiting the Vintage
Petroleum, Inc. website at http://www.vintagepetroleum.com/ and
selecting the microphone icon, or at http://www.fulldisclosure.com/
and typing VPI in the ticker search box and selecting "Go". To
listen to the internet broadcast, participants will need a
multimedia computer with speakers and the Windows media player
installed. Download from
http://www.microsoft.com/windows/windowsmedia/download/default.asp
and test the software prior to the call. Vintage Petroleum is
unable to provide technical support for downloading the software.
The teleconference may be accessed by dialing (800) 362-0574 five
to ten minutes prior to the scheduled start time and providing the
call identifier, "Vintage" to the operator. The webcast and the
accompanying slide presentation will be available for replay at the
company's website. An audio replay will be available until November
14, 2003, by dialing (402) 220-0685. Forward-Looking Statements
This release includes certain statements that may be deemed to be
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements in this
release, other than statements of historical facts that address
production, exploration drilling, exploitation activities,
reserves, capital spending and events or developments that the
company expects are forward-looking statements. Although Vintage
believes the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are
not guarantees of future performance and actual results or
developments may differ materially from those in the
forward-looking statements. Factors that could cause actual results
to differ materially from those in forward-looking statements
include oil and gas prices, exploitation and exploration successes,
actions taken or to be taken by foreign governments as a result of
economic conditions or other factors, changes in foreign exchange
and inflation rates as well as continued availability of capital
and financing, and general economic, market or business conditions,
and risk factors listed from time to time in our reports and other
documents filed with the Securities and Exchange Commission.
Vintage Petroleum, Inc. is an independent energy company engaged in
the acquisition, exploitation, exploration and development of oil
and gas properties and the marketing of natural gas and crude oil.
Company headquarters are in Tulsa, Oklahoma, and its common shares
are traded on the New York Stock Exchange under the symbol VPI. For
additional information, visit the company's website at
http://www.vintagepetroleum.com/ . DATASOURCE: Vintage Petroleum,
Inc. CONTACT: Robert E. Phaneuf, Vice President - Corporate
Development of Vintage Petroleum, Inc., +1-918-592-0101 Web site:
http://www.vintagepetroleum.com/
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