George K. Hickox, Jr., Wiser CEO said, "Wiser has assembled an excellent set of projects and prospects that we plan to pursue in 2004. We continue to be very pleased with our strong cash flow performance and are excited to have added exploration opportunities like the recent Louisiana leasehold purchase."
Estimated Production and Expenses
The Company's net oil and gas production in 2003 was 23.4 BCFE or an average of 64.1 MMCFE per day. Production in 2004 is projected to increase modestly based on existing proved producing volumes coupled with recent discoveries that have been or will be placed on line in the Gulf of Mexico and at Wild River. Additional volumes are projected from the Company's 2004 capital spending program depending on the level of exploratory success.
Wild River production will increase sharply in 2004 due to the start-up of the 15-30 well on January 6, 2004. Wiser has a 50% working interest in the well, which is currently producing at a gross rate of approximately 20 MMCFE per day. Gulf of Mexico production is expected to increase significantly beginning in the second quarter as several recent discoveries begin production. The West Cameron 488 #1 went on line in December of 2003.
The Company expects its exit production rate for 2004 to be between 70 and 75 MMCFE per day.
In Canada, the Company budgeted two exploratory wells targeting the Wabamun formation to follow up on its Wild River 15-30 discovery (50% working interest). In addition, the Company plans to participate in six "field pay" Cretaceous wells at Wild River (average 37% WI).
Four exploratory wells are planned at Hinton-Obed targeting Cretaceous and Mississippian gas plays (average 31% WI) and two exploratory wells are budgeted for the Buick Creek Prospect in British Columbia (50% WI). The first Buick Creek well, the B-84-J, spudded on January 21, 2004.
The Company also plans to participate in 15 wells on its shallow gas plays at Chinchaga and Wolverine (average 20% WI). The Company has essentially 100% working interest in the Wolverine property but elected to participate at lower working interest levels in 2004 due to the poor performance of prior-year drilling programs. As a result of that performance and the implementation of new reserve engineering standards in Canada, the Company intends to write off or reclassify certain proved undeveloped reserves to non-proven status. This action will result in a non-cash impairment charge on the Wolverine property of approximately $16 million net of tax at year-end 2003. At Evi, Loon and Red Earth, the Company has budgeted 10 light oil development wells (average 45% WI).
In the U.S., the Company budgeted three exploratory wells (25% working interest) for the Gulf of Mexico along with $1.6 million for facility costs to bring on-line the previously announced Ship Shoal Block 322, Vermillion Block 61 and East Cameron Block 73 discoveries.
Three exploratory wells are planned at the recently acquired Sabine Project, a 141,000 gross acre block located in Louisiana's Calcasieu and Beauregard Parishes. Wiser expects to operate these wells with a 50% working interest. The Company also expects to drill three exploratory wells at the Wiser-operated Liberty Project on a proprietary 3-D survey acquired in 2003. Wiser has a 35% working interest in approximately 25,000 gross acres in this play located in Liberty County, Texas.
An increase in drilling activity is anticipated at San Juan in 2004 due to the recent down-spacing of the Fruitland Coal formation, the area's primary coal bed methane reservoir. Based on information available at this time, the Company expects to participate in over 100 Fruitland Coal wells and approximately 110 MesaVerde/Dakota wells in 2004 (average 2% WI). In addition, 10 infill development wells are planned at Maljamar, the Company's secondary oil recovery project in southeast New Mexico (average 80% WI).
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