The Meridian Resource Corporation announced its operational budgetary plans for 2008.
The Capital Budget for 2008 will be funded primarily from cash and operating cash flows derived from projections based on its year-end reserve report and planned projects for the year. Depending on the success of the scheduled drilling activities, it is expected to spend approximately $74 million (excluding approximately $7 million of assumed property sales), with an emphasis on repeatable low-to-moderate risk drilling activities designed to provide substantial growth for the future in both rate and reserves.
With the addition of new management and technical staff in the exploration and development division of the Company, we are focusing our efforts to expand proven plays into new areas, reduce our cycle time so that we can succeed or fail smartly and quickly, pushing technical excellence in not only exploration but also drilling and completions to reduce our overall costs.
Our plan for 2008 will focus on strategic acquisitions, emphasize repeatable plays in or around proven areas versus "one-off'' projects, grow oil in the near term, and balance project spending on drilling, land and acquiring and re-processing 3-D seismic data to support the Company's current projects and to re-load future inventory for 2009 and beyond.
Specifically, our plans and areas of focus for 2008 will include: (1) the acceleration of the development as well as the expansion of our east Texas Austin Chalk play; (2) testing of new generation low-to-moderate risk south Louisiana tertiary exploration from newly processed 3-D seismic, including the exploitation of our Weeks Island oil field in south Louisiana; (3) north Louisiana exploitation; and (4) south and central Texas oil projects. With this more conservative approach, we have high expectations of not only better success in the near term but the development of lower risk opportunities in our core areas in Texas and Louisiana.
Based on our current plans and projections, it is anticipated that we will generate excess cash through the year that will provide the Company the necessary liquidity, together with its low leverage position to take advantage of additional projects, acquisitions and/or joint ventures as the opportunities are presented or developed throughout the year.
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