Goodrich Petroleum's Board of Directors has approved a preliminary 2005 capital expenditure budget of approximately $75 million. The Company's planned capital expenditure program for 2005 represents an increase of approximately 75% over estimated 2004 capital expenditures of approximately $42 million. The 2005 budget includes the following major components:
Approximately $48 million for accelerated development of the Company's
acreage in the Cotton Valley Trend of East Texas and Northwest
Louisiana, which the Company considers lower risk drilling activities.
The Company has budgeted approximately 35 wells during 2005, which
represents a 133% increase over the 15 wells drilled and completed in
Approximately $21 million for moderate risk exploitation projects
generated from the Company's existing 3-D seismic database, primarily
on the Company's core properties in the transition zone of South
Approximately $6 million for additional 3-D seismic data acquisition
and exploration activities.
The Company plans to fund the 2005 capital expenditure budget primarily through a combination of projected cash flow from operations and bank borrowings under the Company's existing senior credit facility, as well as an anticipated expansion of the facility pursuant to an existing term sheet.
Commenting on the Company's 2005 capital expenditure budget, the Company's Vice-Chairman and CEO, Walter G. "Gil" Goodrich stated, "The results we have experienced thus far in the Cotton Valley Trend, which now include approximately 15 wells either logged and/or online and producing with a 100% success rate, are within the range of our expected results at this stage of development. As a result, the board has approved a preliminary capital expenditure budget which will allow us to significantly accelerate the development of the play and our existing acreage position."