Pogo's Chairman, Paul G. Van Wagenen, said, "We are now pausing our very active exploration drilling program in Hungary to drill several development wells on our Szolnok No. 2 discovery area. We are committed to fast-tracking our development of this 1,100-acre structure that is located within an approximately 5,700-acre stratigraphic feature, in order to reach production status in early 2005. We are far from finished, however, with exploratory drilling in Hungary," Mr. Van Wagenen continued, "and we hope to fit in at least two more exploratory wells during the fourth quarter of this year. Moreover, we will kick off another new 3-D seismic acquisition program this summer which should lead to additional exploratory drilling in 2005."
Pogo commenced drilling on its Hungarian exploration license in 2003. To date, Pogo has drilled a total of five exploratory wells, including three wells on its 119,000-acre Tompa license area and two wells on its 645,000-acre Szolnok license area. Additional exploratory wells are planned for both of those areas.
The first three wells that were drilled in the Tompa area (the Tompa No. 1, No. 2 and No. 3) have now been fully tested and evaluated. Although hydrocarbons were encountered in each of those wells, Pogo's explorationists have now concluded that there are insufficient hydrocarbons to warrant their completion and development. As a result, Pogo currently expects to recognize a first quarter 2004 expense of approximately $9.5 million related to the Company's drilling of these early exploratory wells in Hungary.
Pogo's plans in Hungary for the remainder of 2004 include both an aggressive drilling and 3-D seismic acquisition program. In addition to the development of the discovery, Pogo expects to flow-test and evaluate the first well drilled on the Szolnok license area (the Szolnok No. 1) upon securing a smaller local rig. The development drilling program starting today is expected to be interrupted in the fourth quarter of this year in order to drill up to two more exploration wells on untested Turkeve and Kenderes areas within the large Szolnok license region. Elsewhere, in July of this year, Pogo plans to acquire approximately 64,000 acres of new 3-D seismic data in the interesting and prospective Koros area located in the southern part of the Szolnok license region.
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