"We believe that this amount is sufficient to sustain continued production growth at double digit rates and fund our successful deepwater exploratory program in the Gulf of Mexico. It also reflects our commitment to financial discipline and our desire to maintain balance sheet strength in a weaker commodity price market," said James T. Hackett, Ocean Energy chairman, president and chief executive officer. "Even though commodity prices are down nearly 50 percent from the highs of 2001, our drilling program has been reduced by less than 25 percent from last year, excluding the $300 million we spent on two niche acquisitions."
On a geographic basis, about half of the projected 2002 capital spending budget will be directed toward Gulf of Mexico activities with 40 percent focused on international programs and the remainder funding domestic onshore exploration and exploitation.
In the Gulf of Mexico, Ocean plans to spend approximately $300 to $350 million to grow its reserve base through the delineation of recent discoveries and additional deepwater exploration. Included in this amount is funding for nine planned exploration tests during the year and the acquisition of deepwater seismic for future exploratory initiatives. A portion of the dollars will also be allocated to development activities in five new deepwater fields and further development of the Nansen and Boomvang deepwater fields in the East Breaks area as well as Gulf of Mexico shelf properties.
On the international front, Ocean has allocated approximately $250 to $275 million of its 2002 capital budget. Nearly half of the total international budget will be spent in Equatorial Guinea on continued development of the Zafiro field. In Egypt, the company plans to develop reserves from its recent A-21 discovery in the East Zeit Concession. Four exploratory wells are also scheduled to drill in Angola on Blocks 24 and 19.
Ocean plans to spend approximately $50 to $75 million on its domestic onshore properties. In the Rockies, the company has scheduled 50 development wells in its Bear Paw field in north central Montana. Further development of assets acquired during 2001 in the Arklatex region is also planned.
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