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Contour is engaged in the exploration, development, acquisition and production of oil and natural gas. Reserves, production and exploration interests are located primarily in Louisiana and the shallow waters of the Gulf of Mexico. At the end of 1999, natural gas represented approximately 78% of the Company's proved reserve base and about 85% of the Company's equivalent daily production. Building on the restructuring of 1999, the Company's strategy is to increase reserves and production through a program of carefully selected exploration and development investments as well as strategic joint ventures and acquisitions.
The Company's activities are focused on selected areas in north Louisiana, south Louisiana and the Gulf of Mexico, where the Company's experienced technical staff has geophysical, geological and operational expertise. Contour's quality producing assets are characterized by relatively high per well production rates and relatively low operating costs. With 81 net wells, production exceeded 60 Mmcfe per day at year-end, or an average of nearly 750 Mcfe per well per day. In 1999, the Company's lifting costs for its production averaged $0.54 per Mcfe; favorable compared to similarly sized oil and gas companies. During 1999 the Company successfully focused its limited capital investment program on wells offering opportunity to replace reserves and production at a favorable cost. While completing fourteen gross (3.7 net) wells during the year, Contour enjoyed a 78% success rate and was successful on all three (1.02 net) of its exploratory wells. The Company maintains extensive seismic databases over its properties with a 3D seismic inventory totaling 1,500 square miles, including 98 square miles of new 3D data acquired in the first quarter of 2000. The Company designs its operating techniques and drilling/completion procedures to enhance well productivity and reduce costs.
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