Endeavour International Corporation plans to spend approximately $90 million of capital during 2008 to fund oil and gas exploration, development and producing activities in the North Sea.
"As a result of our strong cash flow position and expanding portfolio of assets, we have increased our capital budget by almost $20 million from 2007, excluding acquisitions and capitalized costs," said William L. Transier, chairman, CEO and president. "Using conservative commodity price assumptions, we expect to generate sufficient cash flow in 2008 to fund our capital program and allow us to reduce debt by $25 million. The capital expenditure budget represents a substantial investment in developments that will increase our production base and balance our exploration efforts in the United Kingdom and Norway."
More than half of the budget will be directed toward development projects and ongoing investments in producing assets. Some $20 million is expected to be spent for development drilling and facilities improvements to maintain current production levels. Another $30 million will fund the company's efforts in the United Kingdom to move the Cygnus and Columbus discoveries toward field development plans and for further exploitation of undeveloped reserves in the Renee field on Block 15/27.
An estimated $40 to $50 million will be allocated to five to nine exploration prospects in the North Sea. Approximately 60% of the exploration budget will be spent in Norway with the balance dedicated to drilling in the UK. In Norway, Endeavour will drill its first well as an operator with the Jade prospect on PL270 slated to begin drilling during the fourth quarter of 2008. The area is the site of the two Agat natural gas discoveries and the test will set out to identify additional reserves in support of development. Most of the remaining exploratory wells are outside operated. The timing and order of this program will be determined by the completion of ongoing technical work, partner approvals and rig scheduling for individual prospects.
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