Houston Exploration Delays Some Planned Production Until 2006

West Cameron OCS
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The Houston Exploration Company says that due to production delays caused by the recent hurricanes in the Gulf of Mexico, current projections are for 8 Bcfe to 10 Bcfe of previously planned 2005 production to be delayed until 2006. The company recognized relatively minor damage during both Hurricane Katrina and Hurricane Rita, but production at certain locations remains shut-in while waiting on repairs to third-party onshore facilities and pipelines which will return them to their pre-storm capabilities.

Since Hurricane Rita, the company is currently producing approximately 58 MMcfe per day, net, from its Gulf of Mexico region, which is 37 percent of the pre-Katrina rate of 155 MMcfe per day, net. The company's November 2005 net production in the region is expected to range from 120 MMcfe per day to 135 MMcfe per day. In addition to the company's recompletion and development projects, production from two outside operated exploration successes, West Cameron 75 and West Cameron 62, will both be delayed until the first quarter 2006 due to the storms.

Compounding the hurricane production delays, the company's 2005 production results will be further negatively impacted by approximately 6 Bcfe to 7 Bcfe due to performance issues at various fields. Three offshore wells completed during the third quarter 2005 account for more than 50 percent of the impacted production. Two of the wells are producing at restricted rates, one due to a lack of pipeline capacity and the other due to a mechanical problem, and at High Island 115 the company participated in a development well that was dry. The combination of production losses from the hurricanes and the field performance issues is expected to result in total 2005 production for the company of approximately 115 Bcfe, provided that the third-party facilities and pipelines are repaired as expected. This compares to prior guidance of an increase of +/- 6 percent over 2004's rate of 124 Bcfe.

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