Meridian's CEO commented, "We are extremely pleased with this discovery as it confirms the application of newly-defined processing technology to our 3-D seismic and continues to extend the reserves and life of this 60-plus year old field. This is the first of five (5) exploration and development wells scheduled to be drilled in the Company's Weeks Island field during 2004 where we will be pushing the limits of the salt overhangs for new reserves."
The Company also announced that it intends to increase its capital budget to approximately $95 million for 2004 or 25% over its 2003 spending. During 2003, the Company turned production declines into growth with drilling successes in its core area of south Louisiana where it used its proprietary 3-D seismic to develop an inventory of low-risk exploration and exploitation plays. The results are delivering solid production increases with improved returns and enabling Meridian to increase drilling activities to a level of 20-30 wells during 2004, primarily focused in its Biloxi Marshlands project area. In addition to increased drilling activities, Meridian will extend its proprietary 3-D data base at Biloxi Marshlands with the shooting of 258 square miles of new data, the total of which ultimately will provide over 578 square miles covering approximately 400,000 acres in St. Bernard Parish, Louisiana. The 2004 exploration drilling and seismic acquisition activities were initiated in January. It is anticipated that the Biloxi Marshlands project area will comprise a substantial portion of the Company's future drilling inventory over the next several years as it continues to work the entire 3-D data set ranging in depths from shallow to deep for new prospect opportunities.
During 2003 and the first quarter 2004, the Company substantially improved its balance sheet and capital structure by paying down its outstanding debt by $52.8 million, reducing its Senior Bank facility from $165 million to $121 million and a portion of its sub-debt from $18.8 million to $10 million. In addition, outstanding Preferred Stock was reduced from a total of $72 million in value of shares outstanding, to approximately $59 million as a result of conversions to common stock. Consequently, the Company's debt to book capitalization has been reduced from 50% as of December 31, 2002, to an expected 37% as of current date. The Company plans to further simplify its capital structure and reduce total outstanding debt by an additional $35-40 million during 2004, based on current projections of commodity prices, production levels and the current stock price.
Most Popular Articles