The Meridian Resource Corporation recently closed on the purchase of a major land rights position covering over 190,000 acres located in the Company's focus area of south Louisiana which it believes will significantly improve the overall risk profile of the Company's exploration and production program. The play has been defined by a combination of 3-D seismic and recent wells drilled in the immediate vicinity of Meridian's acreage, which confirm direct hydrocarbon indicators visible on both 2-D and 3-D data sets owned by the Company.
The Company plans a multiple-well exploration and development program for the area and has begun permitting the first of four planned 3-D seismic surveys of approximately 150-190 square miles each for a total of approximately 500 square miles of additional data. Current 3-D seismic data in the area has been licensed by the Company and forms the basis for the initial 3-4 wells scheduled to be drilled during 2002, with the first beginning during the second quarter 2002. Depending on the results of the additional 3-D data acquired, additional wells are planned with expectations that the Company will drill 12-15 wells per year in the immediate vicinity during 2003 and the years following as part of Meridian's continued exploration in this region. Meridian and its internal partners own 100% of the project area. Funding of the project will be from internal cash flow and corporate financing.
Joseph A. Reeves, Jr., Chairman and Chief Executive Officer, commented, "This project represents a unique opportunity for Meridian to attain organic growth of both reserves and production with a high level of confidence for repeatability. It is the exception rather than the rule to find such a large acreage position (over 190,000 acres) in this very prolific producing area of south Louisiana which provides the option to drill multiple low-cost, lower-risk, shallower (8,500'-12,500') wells in a sand rich environment which has been under-drilled and under-exploited. With the new data, we believe we have only scratched the surface of exploration opportunities for this region. We extend our appreciation to the landowners of the region for their confidence in Meridian's ability to fully develop their acreage. This play will be an integral part of our future capital budget and plans for near and long term growth."