Remington Updates Production and Drilling Activities
Remington Oil and Gas Corporation announced that the third quarter production volumes were in line with prior guidance at levels between 7.1 and 7.2 BCFE. Production for the year is anticipated to be approximately 28.5 BCFE or approximately 42% above the prior year production levels. To date in 2001 the company has completed 26 of 33 wells drilled. Total dry hole and exploration expense for the third quarter will be approximately $6.0 million.
Since the last operations update, Remington has participated in seven offshore wells and numerous production operations as detailed below:
- West Cameron 170 - The West Cameron 170 #A-7 development well has been drilled to a total depth of 17,610 feet, and production casing has been set. This well logged 150 feet of net pay in our existing field pay sands and 25 feet of potential pay in a sand located below the deepest producing reservoirs in the field. Completion operations are under way. Remington has a 20% working interest in this well. Drilling operations on the West Cameron 170 #7 exploratory test will commence as soon as completion operations are finished at the A-7 well. Remington will have a 42% interest in this 17,600 foot exploratory test which is anticipated to reach total depth near year end 2001. NEXEN Petroleum Offshore USA, Inc. operates West Cameron 170 and owns a 78% working interest in the A-7 well and a 56% working interest in the #7 well.
- West Cameron 417 - The West Cameron Block 417 #1 has been drilled to 8,080 feet and has logged 80 feet of net gas pay in two sands. An intermediate string of casing has been set, and drilling will continue to the proposed total depth of 9,080 feet. After drilling operations are completed, the well will be flow tested followed by the installation of a caisson structure. First production is anticipated during the second quarter 2002 once a flowline and gas production facility is installed. Remington is operator of this discovery with a 50% working interest. Magnum Hunter Resources, Inc. and Wiser Oil Company each own 25% working interests.
- East Cameron 184 - Fabrication of this six-slot, three-pile platform is underway. This platform will have a gas processing facility capable of handling 50 million cubic feet of gas per day. Prior to the platform installation, scheduled for December 2001, a development well will be drilled on our adjoining block 179. Drilling of this 12,800 foot well is to commence the week of October 22nd. Production from this development is expected in the first quarter 2002. Remington is operator of East Cameron Blocks 179, 184 and 185 with a 57.5% working interest in each. Magnum Hunter Resources, Inc. and Wiser Oil Company own 30% and 12.5% respectively.
- East Cameron 305 - Production has commenced on this discovery, and it is currently producing at 13 million cubic feet of gas equivalents per day. A second well, the A-2, was drilled to 6,563 feet and temporarily abandoned for possible later reentry and a sidetracking operation. Remington owns a 75% working interest in this field with Magnum Hunter Resources, Inc. owning the remaining 25% working interest.
- East Cameron 345/360 - The East Cameron 360 #1 and the East Cameron 345 #2 have been drilled and completed. This field is in initial start up with current rates of 15 million cubic feet of gas equivalents per day. Remington has a 37.5% working interest in this field. W&T Offshore, Inc. operates and owns a 50% working interest, with Magnum Hunter Resources, Inc. owning the remaining 12.5% working interest.
- South Marsh Island 35 - Operations are proceeding on schedule to bring this 2001 oil discovery on line in the fourth quarter of 2001. Remington is operator of this discovery with a 62.5% working interest and Magnum Hunter Resources, Inc. has the remaining 37.5% working interest.
- South Marsh Island 93 - The previously announced South Marsh Island 93 #1 new field discovery was flow tested from the lower zone at 1,630 barrels of oil and 2.7 million cubic feet of gas per day. The South Marsh Island 93 #2 was drilled to 14,415' to test a separate geologic structure and found no commercial hydrocarbons. This well is being plugged and abandoned. Facility and pipeline design is underway for the #1 well with first production expected to commence in the second quarter of 2002. Remington owns a 57.5% working interest in this well while Magnum Hunter Resources, Inc. and Wiser Oil Company own 30% and 12.5% respectively.
- Eugene Island 302 - Construction of a three-pile, three-slot production platform is nearly completed and ready for installation. Following the platform installation, scheduled for December 2001, additional drilling and completion operations will commence on the block. First production is expected from this new oil and gas field in the first quarter 2002. Remington is operator with a 57.5% working interest. Magnum Hunter Resources, Inc. and Wiser Oil Company own 30% and 12.5% respectively.
- Eugene Island 397 - Installation of a 12 slot drilling and production platform on this discovery is scheduled for late this month or early November. The platform will have a production capacity of 15,000 barrels of oil and 50 million cubic feet of gas per day. A drilling rig is to be installed on the platform in November to commence drilling and completion operations. Initial production is anticipated in the first quarter 2002 with full production anticipated by the end of the second quarter 2002. Remington owns a 37.5% non-operated working interest in this development. W&T Offshore, Inc. operates and owns a 50% working interest with Magnum Hunter Resources owning the remaining 12.5% working interest.
- South Timbalier 214 - The company participated with a 33% non-operating working interest in a 13,920' unsuccessful exploratory attempt on this block. This well has been plugged and abandoned.
- Onshore - Remington participated in 5 onshore wells since the last update with three of these being successful. Two of these three wells are on production and the third is currently being tested. In a separate project, Remington is the operator and is conducting two 3-D seismic surveys covering 55 square miles in the Mississippi Salt Basin. Exploratory drilling is anticipated on these high potential prospects in 2002.
James A. Watt, President and Chief Executive Officer of the company
stated, "Low rig rates and oilfield service costs enhance the economics of our exploratory prospects. We intend to maintain an aggressive drilling program funded through cash flow and commercial bank debt to add new production for the second half of 2002 and beyond."