Magnum Hunter has also participated in a new field discovery at West Cameron 403. The West Cameron 403 #1 well was drilled to a depth of 7,750 feet and encountered 106 feet of gas productive sands. The well flow tested at a rate of over 16 million cubic feet of natural gas equivalents ("MMcfe") per day. A caisson production structure is in the process of being installed, with initial production expected to commence during the first quarter of 2004. Magnum Hunter owns a 40% working interest in West Cameron 403 and 33.33 % net revenue interest. Remington Oil & Gas Corp. owns a 60% working interest and is the operator.
Positive test results were also experienced at Vermillion 61, casing has been set after finding 60 of gross feet of productive sands. From the same surface location, the rig will drill the East Cameron 73 development location. Both wells will be completed following the drilling of the second well. Magnum Hunter owns a 25% working interest in both of these projects and 20.83% net revenue interest. Remington Oil & Gas Corp. owns a 50% working interest and is the operator. Production from Vermillion 61 and East Cameron 73 is anticipated to commence in early 2004.
Magnum Hunter is currently estimating an additional 20 million cubic feet of natural gas equivalents of new net daily production ("MMcfe") will commence producing during the fourth quarter of 2003 and during the first quarter of 2004 from various lease blocks in the Gulf of Mexico. This estimated incremental new shelf production will come from these recent discoveries the Company has made along with various partners this year.
The five project areas with the working interest percentage owned by Magnum Hunter are as follows: Eugene Island 355 (33.3%); West Cameron 403 (40%); West Cameron 488 (25%); Vermilion 61/East Cameron 73 (25%); West Cameron 472 (50%).
Commenting on the Company's activities in the Gulf of Mexico, Mr. Charles R. (Chuck) Erwin, Senior Vice President of Exploration for Magnum Hunter stated, "Our Company's daily oil and gas production from the Gulf of Mexico continues to increase each quarter. Gulf of Mexico production is now averaging around 65 MMcfe per day, which is approximately 31% of Magnum Hunter's company wide net daily production. With drilling rig and service costs remaining at unusually low levels in relation to current commodity prices, our Gulf of Mexico drilling activity has captured the largest piece of our Company's 2003 capital budget. The total potential reserve exposure from the Company's six remaining 2003 Gulf of Mexico exploratory projects, net to Magnum Hunter's interest, exceeds 51 Bcfe. Since entering the Gulf of Mexico in May, 1999, Magnum Hunter has achieved an 83% overall drilling success rate with 72 out of 87 Gulf of Mexico wells successfully drilled thru October 31, 2003. Our large inventory of 171 OCS Blocks will allow Magnum Hunter many years of continued exploration activity in this highly prolific natural gas prone region. Over 1 Tcfe of risk adjusted Gulf of Mexico drilling prospects have been identified by management and third party consultants for future exploration activities."
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