Stone Energy Announces 2005 Capital Budget

Stone Energy has approved a 2005 capital spending budget of $315 million, before acquisitions and capitalized overhead costs, which includes the drilling of 62 gross wells (39 net wells). We expect approximately 15% of this spending to be allocated to exploratory drilling in the deep water of the Gulf of Mexico. Approximately 50% of this spending budget is allocated to exploratory and development operations in the conventional Gulf of Mexico shelf (including onshore), 20% to the deep shelf of the Gulf of Mexico and 15% to the Rocky Mountains.

Additionally, we acquired the leasehold rights to approximately 27,000 net acres in Utah for approximately $5 million. We intend to test the coalbed methane potential of this acreage at depths of 2,000 to 4,000 feet with a three to five well exploratory program during 2005 followed by a development program if exploration is successful. This project is located approximately 40 miles southeast of our Monument Butte field and represents our first move into a coalbed methane play.
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