Included in the budget for 2006 are funds for seismic and lease acquisition in water depths up to 5,000 feet in the Gulf of Mexico, a new focus area which will augment the Company's existing operating areas on the Gulf of Mexico shelf and in south Louisiana. The 2006 budget also includes funds for the drilling of the Denali prospect at East Bay. The Company recently announced that it had finalized the partners for the first well, which is expected to spud near year-end. EPL will hold a 40% working interest in this first well.
Richard A. Bachmann, EPL's Chairman and CEO, commented, "Our initial 2006 budget will allow us to achieve a number of objectives over the next twelve months that will further the growth and development of the Company. We will continue to prosecute our shelf drilling program as we have in the past several years, and will layer in more exciting higher potential opportunities. One such example is our first well on the Denali prospect. We will also launch our deepwater effort in a measured way, and we expect to be active beginning with the March 2006 lease sale. Lastly, we expect to drill the first deep prospect in our recently acquired south Louisiana focus area in the coming months. Most importantly, the 2006 exploration and development budget as projected will be funded entirely through internally generated cash flow, giving our investors full upside exposure to the potential of the program. We have a higher quality portfolio with more internally generated prospects than we have ever had. That leaves me as optimistic as I have ever been about our future."
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