As of April 20, 2004, The Meridian Resource Corporation has reduced its outstanding long-term debt by $30.3 million to $122.0 million from $152.3 million as of Dec. 31, 2003. The reduction in long-term debt was comprised of $5.3 million of cash payments on the senior credit facility, $5.0 million of cash payments on the Fortis Capital note payable and the conversion of $20.0 million of the Company's 9 1/2% Convertible Subordinated Notes at a conversion price of $5.00 per share. In addition, during 2004 the holders of approximately 97,200 shares of the Company's convertible preferred stock have converted into common stock, reducing the total outstanding value of the preferred shares to approximately $50.7 million from a high of approximately $72.7 million during 2003. After giving effect to the aforementioned cash payments and conversions the Company's debt to total capitalization ratio at Dec. 31, 2003, would have been reported at 31.5% compared to the actual ratio of 38.4% at Dec. 31, 2003. Meridian has budgeted approximately $95 million in capital expenditures during 2004 and plans to continue to utilize excess cash flow to reduce debt and improve its balance sheet and liquidity.
Meridian maintains its exploration and exploitation focus searching for new reserves in the south Louisiana and south Texas Gulf Coast regions. The Company believes that its exploration strategy will result in plays similar to its Biloxi Marshlands project area and its Thornwell field in west Louisiana, both of which utilize 3-D seismic to identify potential hydrocarbon indicators for shallower, higher-confidence, multiple-well plays.