Venoco's total proved oil and gas reserves as of December 31, 2009 were 98.3 million barrels of oil equivalent (MMBOE) at SEC pricing of $61.04 per barrel of oil and $3.87 per thousand cubic feet (MCF) of natural gas. The company's production in 2009 was approximately 7.5 MMBOE or 20,622 BOE per day.
"Net of production and the Hastings sale, we added almost 16 MMBOE of reserves this year," said Tim Marquez, Chairman and CEO. "Our biggest adds were in the Sacramento Basin where we've demonstrated the reserve capacity associated with downspacing and low-resistivity pay."
Net of production, the company added 12.2 MMBOE of proved reserves in its Sacramento Basin assets, including 2.7 MMBOE from a mid-year acquisition. In its Southern California assets, the company added 2.8 MMBOE to proved reserves net of production. In its Texas assets, which the company has announced are for sale, reserves, pro forma for the sale of Hastings and net of production, were flat.
Year-end 2009 reserves net of production increased 18% compared to year-end 2008 reserves, pro forma for the February 2, 2009 sale of the Hastings field, of 89.8 MMBOE. The company replaced 210% of its 2009 production. The company expects 2009 all-in finding and development costs will be approximately $12.12 per BOE and that organic finding and development costs, which exclude proved property acquisitions, will be approximately $13.63 per BOE.
The pre-tax PV-10 value of the company's reserves using SEC pricing of $61.04 per barrel for oil and $3.87 per MMBTU for gas is $801 million. The company's estimate of reserves using the December 31, 2009 NYMEX 5-year strip pricing is 101.3 MMBOE. The pre-tax PV-10 value using the NYMEX 5-year strip pricing is $1.67 billion. See the end of this release for a reconciliation of PV-10 to a standardized measure.
"We were very pleased with our production results this year and were able to exceed our original annual guidance of 19,000 BOE/d by 8.5%," said Mr. Marquez.
The company announced that production in the fourth quarter of 2009 was 20,079 BOE/d, down slightly from third quarter production of 20,264 and flat with fourth quarter 2008 production, pro forma for the Hastings sale, of 20,110 BOE/d.
For full-year 2009, production was 20,622 BOE/d, down from full-year 2008 production of 21,674 BOE/d. Pro forma for the Hastings sale, full-year 2009 production was 20,397 BOE/d, up 7% over pro forma full-year 2008 production of 19,088 BOE/d.
Production from the Sacramento Basin was steady in the fourth quarter. The company has increased from a 1-rig drilling program in the Basin in the third and fourth quarters of 2009 to a 3-rig drilling program in early February 2010. Under the current capital expenditure plan, daily production in the Basin is expected to remain flat in 2010.
In Southern California, production was up slightly quarter over quarter. The company expects to see production up slightly in 2010, with some of the effect of 2010 spending realized in 2011.
The company expects to complete the sale of some or all of its Texas assets sometime in the second quarter of 2010.
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