GeoResources, Inc. reported that its current capital expenditure budget for 2008-2009. The Company believes the existing portfolio of properties have exploitation and exploration upside and recently increased its capital budget to $61.5 million, including expenditures associated with an affiliated institutional partnership, from the previously announced $40.0 million. Estimated expenditures are diversified and include a multitude of projects intended to increase production through field re-engineering, well recompletions and workovers and the development of proved and non-proved reserves through conventional and horizontal drilling and waterflood projects. Furthermore, the budget provides funding for exposure to new reserves through exploratory drilling of existing prospective acreage and expansion of seismic, acreage and prospect inventory.
The Company believes the proposed expenditures and level of activity will have positive effects on production and estimated reserve quantities. The budget is subject to significant change as we further evaluate existing properties and alternative projects and continue to expand our acreage positions. This budget may be accelerated pending evaluation of cash flow and proceeds from possible divestitures, subject to industry considerations including drilling and service rig availability and adequate staffing to manage activities and control costs. In addition, certain expenditures that are held by production may be deferred in favor of new opportunities.
Frank A. Lodzinski, Chief Executive Officer of GeoResources, said, "We have implemented our diversified drilling and development program and continue to expand our acreage and prospect inventory. Our actions are consistent with our business strategy which we have demonstrated in prior companies. Specifically, we first build a cash flow base and portfolio of drilling and development opportunities, then we focus on expanding our inventory. We have dedicated substantially all of our free cash flow to our budget. These projects could be accelerated and we may further expand our activities pending additional production and proceeds from divestitures. Our focus includes the Rockies, the Williston Basin, the Gulf Coast and South Texas, where there is the potential to add both high impact wells and long life economic reserves. We believe our diversified approach will allow the Company to continue to grow profitably."
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