Burlington also confirmed that its long-term production growth target range remains unchanged at a 3-to-8 percent annual average over the next several years, and attributed these growth projections to the quality of its asset portfolio. For 2002, the company expects about 8 percent absolute growth over 2001, or 10 percent growth on a per-share basis. For 2003, the company expects growth at the low end of the range due to the strong 2002 performance and higher than anticipated property sales. Looking ahead to 2004, as major development projects come online, the company expects production growth to again approach the upper end of the range.
"During 2002, we significantly upgraded our portfolio by successfully integrating high-quality properties acquired primarily in Canada," said Bobby S. Shackouls, chairman, president and chief executive officer. "We also completed a very successful program to divest non-core assets. As a result, we will exit the year with properties that offer lower production decline rates as well as significant exploitation and development opportunities to help drive future growth. In addition, we expect to achieve contributions from several of the major development projects."
Approximately 75 percent of the 2003 exploration and production capital is earmarked for core programs in North America, with 45 percent allocated to Canada and 30 percent to the U.S. Most of the remaining 25 percent is expected to fund oil development projects in Algeria and China and a natural gas development project in the U.K.'s East Irish Sea. All are expected to contribute substantially to production following scheduled start-ups in 2003 and 2004. Burlington is also conducting exploration and development programs in several other countries.
The company updated its production guidance for the fourth quarter of 2002 based on actual volumes for October and estimated volumes for November and December. Burlington's fourth-quarter 2002 total production is now estimated to range from 2,350-to-2,490 million cubic feet equivalent per day (MMcfed), compared to the previous guidance range of 2,260-to-2,490 MMcfed. The increase is attributable to higher production in Canada and longer than anticipated retention of several of the properties being divested.
On a gas equivalent per unit basis, fourth-quarter costs are now estimated as follows: cash costs (excluding non-income taxes and transportation expense) of $0.70 to $0.73; depreciation, depletion and amortization (DD&A) expense of $0.84 to $0.87; and transportation expense of $0.34 to $0.36. All other guidance provided in October 2002 for the current quarter remains unchanged. Burlington expects to announce fourth-quarter results on Jan. 23, 2003.
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