"We have already identified several work opportunities in our detailed field study of East Cameron 321 and we anticipate implementing this plan, depending on rig availability, by the fourth quarter," said Tracy W. Krohn, Chairman and Chief Executive Officer. "Furthermore, we continue to execute on our strategy of acquiring assets in all pricing environments at fair prices.
"We continue to have success with our exploration and development program. During the second quarter, we successfully drilled five exploration wells and one development well.
Field Name/Well Category Working Interest % Eugene Island 218 #D-5ST Exploration 100.0% Eugene Island 219 #E-8ST Exploration 100.0% Eugene Island 53 #G-1ST Development 14.0% Ewing Bank 949 #2st3/4 Exploration 100.0% High Island A568 #A-19 Exploration 33.3% West Cameron 328 #2 Exploration 25.0% We were unsuccessful at one exploration well location." Field Name/Well Category Working Interest % Eugene Island 93 #14 Exploration 23.3%
"This brings our success rate for the first two quarters of 2005 to 10 out of 13 drilled," continued Mr. Krohn. "With half the year behind us, we are on track with both our exploration and development programs."
"We are pleased with initial rates of the wells that have been brought on production during the second quarter," added Mr. Krohn. "We believe that we are on target to meet or exceed the high end of the range of our second quarter 2005 production guidance of 18.3 Bcfe to 19.3 Bcfe. We are also on target for our full year 2005 production guidance of 83.1 Bcfe to 87.4 Bcfe. Recently, we were notified that Transco's North High Island Gathering System lateral pipeline that was planned to be temporarily shut-in for repairs in the 3rd quarter has been delayed until 2006. At this time, we are not adjusting our production guidance until we have assurance that such delay is certain."
All facility projects that W&T previously announced are currently underway. Although the Company has experienced some minor delays due to either weather or equipment availability, it expects to meet 3rd quarter expectations.
The planned 3rd and 4th quarter development drilling is also progressing as expected. For the projects expected to be completed in the 3rd quarter, only two projects are expected to slide from the 3rd quarter to the 4th quarter due to rig availability. The Company does not expect this to affect the production build up for the 3rd or 4th quarter. Meanwhile, the 4th quarter projects are still on schedule.
During the quarter, W&T signed a contract with Compagnie Generale de Geophysique (CGG) to acquire additional seismic data. The contract will cover approximately 1,213 OCS Blocks in the central GOM from Garden Banks to Mississippi Canyon.
"We are also pleased to report that Tropical Storm Cindy had very little impact on our production or timing of any of our on-going projects. As for Hurricane Dennis, we continue to monitor this situation very closely and will provide any updates as they become available. We have begun evacuating non- essential personnel from our eastern Gulf of Mexico rigs and platforms, which should be complete by the end of business today. At this time, no production has been shut-in from these fields," Mr. Krohn stated.
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