"As we focus on returning our operations to their previous levels, we are pleased that 75% to 80% of our pre-Katrina production volumes have resumed and we expect to defer only about 7% of our previously anticipated production in 2005 due to the storm," said Tracy W. Krohn, Chairman and Chief Executive Officer. "In addition, we are working hard to take advantage of several opportunities before us that could result in additional wells coming on production in 2005 that were not in our original forecast. We are also pleased to note that based on our internal estimates, we believe that the proved reserves we added in first half of 2005 should replace more than 150% of our first half 2005 production.
"Although we have a good understanding of Katrina's impact on our production, the storm's impact on costs are less clear," added Mr. Krohn. "Prior to the storm, our operating expenses for the year appeared to be within the low end of our guidance. However, there are too many unknown variables that may affect costs in 2005 to be able to reaffirm or change our guidance on operating expenses at this time. Of course, with 100% of our oil and gas production unhedged, we are fully benefiting from the high commodity prices, which should more than offset the negative impact of Hurricane Katrina on our net income for 2005."
Outlook: Estimated Daily Production Revised Prior Revised Prior Third Third Estimate Estimate Quarter Quarter for Full-Year for Full-Year 2005 2005 2005 2005 Crude oil (MMBbls) 1.27 - 1.34 1.4 - 1.5 4.8 - 5.0 4.9 - 5.2 Natural gas (Bcf) 12.5 - 13.2 13.1 - 13.8 48.2 - 50.7 53.5 - 56.2 Total (Bcfe) 20.1 - 21.2 21.6 - 22.7 76.9 - 81.0 83.1 - 87.4
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