Burlington currently expects third-quarter 2005 daily production to fall within the lower portion of its previously announced guidance range of 2,800 to 3,000 million cubic feet of natural gas equivalent per day (MMcfed). The quarterly volumes will reflect the impact of production curtailments primarily resulting from storms in the Gulf of Mexico. Burlington has restored the majority of the 180 MMcfed of production that was curtailed immediately following Hurricane Rita, and is working aggressively to restore approximately 60 MMcfed, or 2 percent of the company's total production volume, that remains shut in at this time.
Also on a preliminary basis, average realized commodity prices for the third quarter, including results of hedging and wider-than-normal basis differentials for natural gas, are expected to range between $7 to $7.30 per thousand cubic feet for natural gas, $34 to $35 per barrel for natural gas liquids and $56 to $57 per barrel for crude oil.
The company expects its unit costs, when adjusted for expected production volumes, to remain within previously disclosed guidance ranges, with the exception of general and administrative expenses. These expenses, when compared to previous guidance, will include approximately $30 million in additional pretax costs related to the mark-to-market on a stock-based compensation program reflecting Burlington's share price at the end of the quarter.
Burlington has also made considerable humanitarian and operational contributions to relief efforts for hurricanes Katrina and Rita, including assisting affected employees and making donations through the Burlington Resources Foundation to key relief agencies involved in recovery work.
Bobby Shackouls, Burlington's chairman, president and chief executive officer, said, "We are working to ensure the safety and well being of our employees and neighbors in the areas impacted by these two tragic storms. Secondly, we remain committed with the rest of our industry to working with federal, state and local officials to restore lost production and bring new sources to market in order to moderate the extremely high energy prices being experienced by our fellow Americans. And finally, we continue to seek long-term solutions to our nation's growing energy requirements in a manner that is acceptable to the majority of our citizens."
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