Bill Barrett has announced certain unaudited operating results for year-end 2008 and certain operating guidance for 2009. 2008 highlights include (unaudited):
"Looking ahead, we have a strong hedge position for 2009 and $331 million in liquidity, which helps sustain us in these challenging times. We currently plan to spend up to $400 million in our 2009 capital budget, which we expected to align with cash flow and still generate double-digit production growth. We expect to invest in a strategically balanced capital program including development, delineation, and exploration, as we continue to grow our production and reserves, generate strong returns and expose our investors to potential new growth prospects. Part of this program will be continued development drilling at our prolific West Tavaputs program. Our 2009 planned activity in West Tavaputs is not dependant upon receiving a Record of Decision ('ROD') on our Environmental Impact Statement ('EIS'), which has been delayed as the Department of Interior transitions to the new administration. We look forward to completing this process in the coming months. We will remain disciplined but flexible with our 2009 capital spending as we monitor business conditions and commodity prices and continue to execute with operational excellence on our diverse portfolio of projects."
2008 Year-end Estimated Reserves, Production and Capital Expenditures
(The following information is unaudited and preliminary. Audited and final results will be provided in our Annual Report on Form 10-K for the year-ended December 31, 2008 to be filed with the SEC at the end of February 2009.)
Reserve replacement ratio 436%
Year-end estimated proved reserves of 818.3 Bcfe were 96% natural gas and 4% oil. Further, estimated proved reserves were 53% developed and 47% undeveloped. The present value of proved reserves was estimated at $1.0 billion, before the effect of income taxes, based on the December 31, 2008 CIG (Colorado Interstate Gas) natural gas price of $4.605 per MMBtu, WTI (West Texas Intermediate) oil price of $41.00 per barrel and a 10% per annum discount rate. Using successful efforts accounting, the Company expects to record impairments of approximately $25 million (pre-tax) in the fourth quarter of 2008 related to certain properties in the Wind River Basin.
Estimated production for 2008 was 77.6 Bcfe and was comprised of 95% natural gas and 5% oil. Estimated fourth quarter 2008 production was a Company record at 20.6 Bcfe, up 20% from 17.2 Bcfe in the fourth quarter 2007 and up 5% sequentially.
Preliminary, unaudited capital expenditures for 2008 were $601 million, in line with our recently updated guidance. The Company did not have any material acquisitions or divestitures in 2008.
Year-ended December 31, 2008
Totals 818.3 77.6 $ 601
The Company had $254.0 million in outstanding borrowings on its revolving credit facility at December 31, 2008 and currently has $262.0 million in outstanding borrowings. The revolving credit facility has commitments totaling $592.8 million and a borrowing base of $600.0 million, which provides the Company with $330.8 million of borrowing capacity. The Company's borrowing base is subject to redetermination in the second quarter of 2009 based on year end 2008 proved reserves and hedge position. The Company also had $172.5 million of convertible senior notes outstanding at December 31, 2008.
2009 Operating Guidance
The Company intends to align its capital expenditures with cash flow from operations. Based on near-term commodity price outlook and capital markets availability, the Company may adjust capital expenditures throughout the year, which may impact production and other operating metrics. The Company expects to drill up to 175 wells. Capital expenditures are expected to be allocated approximately 80% to 85% for development and 15% to 20% for delineation and exploration. At West Tavaputs and Piceance, the Company had 70 wells that were drilled in 2008 and that were waiting on completion as of December 31, 2008.
General Corporate Update
Operation and Exploration Brief:
The Company currently is operating four conventional rigs (two in Piceance, one in Uinta - West Tavaputs, and one in Paradox).
Paradox Basin, Colorado -- At Yellow Jacket (working interest 55%), the Company began gas sales in December 2008 and is currently selling 4 MMcfd (gross) from three Gothic shale wells. Current production rates are inhibited due to high line pressure and a lack of compression in parts of the field. Third-party field compression is expected to be increased in February 2009. The Company is currently drilling its fourth horizontal well. In Green Jacket (working interest 100%), the Company drilled and set production casing on its first horizontal Hovenweep shale gas test, which is currently waiting on completion. The Company intends to operate a one rig program in the Paradox in 2009.
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