Goodrich Petroleum announced that the Company's board of directors approved an increase in the 2004 capital expenditure budget from $25 million to $45 million. The board approved the increase in order to accelerate the development of the Company's acreage in the Cotton Valley Trend of East Texas and Northwest Louisiana and due to the Company's improving projections for cash flow from operations. The Company plans to fund the increased capital expenditure budget through a combination of cash flow from operations and borrowings under the Company's credit facilities. Approximately two-thirds of the capital expenditure budget has been earmarked for exploration and development drilling in the Cotton Valley Trend.
NEW 3-D ACQUISITION.
Goodrich also announced that it has entered into 3-D seismic permits and oil and gas lease options to acquire an approximate thirty (30) square mile 3-D seismic survey over the St. Gabriel Field in Ascension and Iberville Parishes, Louisiana. The St. Gabriel Field is a deep-seated salt dome which is located approximately fifteen miles southeast of Baton Rouge, Louisiana. The Field was originally discovered in 1941 and to date ninety (90) wells have been drilled in the Field with cumulative production of approximately 83 Bcf of natural gas and 35 million barrels of crude oil, or approximately 293 Bcfe. The Company plans to commence shooting the 3-D seismic survey during the third quarter of 2004 and expects to receive the processed data near the end of the year. The Company will retain an approximate seventy percent (70%) working interest in the project and has budgeted approximately $1.75 million for the acquisition of the rights and the 3-D seismic survey. Post 3-D development drilling activities are not expected to occur prior to 2005.
The Company has continued an active exploration and development program during the second quarter of 2004 and estimates second quarter capital expenditures were approximately $10 million. The Company drilled and completed the following wells:
Burrwood/West Delta 83 Fields.
The Company drilled and completed its initial Dempsey Prospect well, the SL 17381 No. 1. The well is now online and current gross production is approximately 8,000 Mcf of gas per day, 350 barrels of oil per day, 5 barrels of water per day on a 20/64" choke with 3375# flowing tubing pressure. The Company is the operator of the well with a 70% working interest.
The Company drilled and completed its initial Norton Prospect well, the SL 1922 No. 16 S/T. The well is now online and current gross production is approximately 420 barrels of oil per day, 650 Mcf of gas per day and 12 barrels of water per day on a 11/96" choke with 1425# flowing tubing pressure. The Company is the operator of the well with a 65% working interest.
The Company is currently completing its State Lease 2227 No.1 (B-3) sidetrack well. The Company is the operator of the well with a 65% working interest.
Plumb Bob Field.
The Company has completed the acquisition of its new thirty square mile 3-D seismic survey over the Plumb Bob Field in St. Martin Parish, Louisiana. The Company anticipates receipt of the data in the third quarter.
Cotton Valley Trend.
The Company has drilled and is completing its Charles Taylor No.1 well (70% working interest) in the Bethany-Longstreet Field of Northwest Louisiana, which is the initial Cotton Valley test on the Company's acreage in the Field. In East Texas, the Company has drilled and is completing two Cotton Valley wells, the Goodrich Petroleum Company, Ashby No.1 (100% working interest) and the Goodrich Petroleum Company, Prior Heirs No.1 (100% working interest), and is currently drilling a third, the Goodrich Petroleum Company, Martin-Tuttle No.1 well (85.5% working interest), which is expected to reach total depth during the second week of July. Goodrich currently has two drilling rigs under contract in the Cotton Valley Trend and expects to add a third rig during the third quarter of 2004.
The Company has elected to participate in the drilling of two wells in the Lafitte Field in Jefferson Parish, Louisiana, the Inverness and Calloway Gardens prospects, and has elected to participate in seven workovers or recompletions of existing wells proposed by the operator during the third quarter.
Net production for the second quarter is expected to be flat with the first quarter production volumes of approximately 19,500 Mcfe (net) per day. During the second half of June, the Company initiated production from five recently completed wells and estimates the entry rate for the third quarter to be between 23,000-25,000 Mcfe (net) per day. Current production volumes are approximately sixty percent (60%) natural gas and forty percent (40%) crude oil and natural gas liquids.
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