Louisiana Drilling Results
The Company is preparing to plug and abandon the Mervine Jankower #1 (Helen Gayle) in Acadia Parish after attempts to complete the well as a commercial producer were unsuccessful. The Company will record a pre-tax charge of approximately $6.4 million related to the abandonment of this well during the third quarter of 2004.
The Company has also participated in two non-operated wells in south Louisiana that were nonproductive, and will record a pre-tax charge of approximately $2.5 million related to these wells during the third quarter of 2004.
The Company has successfully completed two wells on its Fleur Prospect in Plaquemines Parish. The first well on the prospect, the State Lease 17378 #1 was completed as an oil well and tested at an average of 446 bopd and 548 mcfpd with a flowing tubing pressure of 2,035 psi. The second well, the State Lease 17378 #2 (formerly the State Lease 17376 #1), was recently completed as a gas well and tested at an average of 2,073 mcfpd, 137 bopd and 125 bwpd with a flowing tubing pressure of 4,827 psi. The Company expects both of these wells to begin production during the fourth quarter of 2004 after construction of production facilities is complete.
The Company is currently drilling the McIlhenney #1 (Tabasco), an 18,000-foot exploratory well in Vermillion Parish. The Company will pay 32.5% of the costs to drill this well to earn a 24.4% working interest. In addition, the Company is currently drilling the Daigle et al #1 (Bosco Kelp), a 13,000-foot exploratory well in Acadia Parish. The Company owns 100% of the working interest in this well.
Revised Production Estimates
The Company also reported that production from several of its properties in south Louisiana has been temporarily suspended due to structural damage caused by Hurricane Ivan in mid-September. The following table summarizes the effect of this loss in production on the Company's previously issued forecast of average daily production for the third and fourth quarters of 2004.
Company-wide Average Daily Third Fourth Production Quarter Quarter ----------------- ---------------- Gas (Mcf): Previous estimate 47,500 to 53,500 45,500 to 51,500 Current estimate 45,100 to 51,100 41,000 to 47,000 Estimated percentage reduction 4.7% 9.3% Oil (Bbls): Previous estimate 6,750 to 6,950 6,800 to 7,000 Current estimate 6,500 to 6,700 6,350 to 6,550 Estimated percentage reduction 3.6% 6.5%
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