Devlan to Drill 30 Wells in 2004
|Tuesday, January 13, 2004
Devlan Exploration has it surpassed its budgeted objectives with total capital expenditures in excess of $29 million for 2003. An accelerated drilling program with a number of increases in the capital budget throughout the year enabled the Company to reach a number of new cash flow and earnings milestones. Devlan drilled 26,500 meters, a 74% increase over 2002, for a total of 28 (net 19.0) wells during 2003 with a net success rate of 83%.
In the fourth quarter, emphasis on immediate cash flow generating wells resulted in a total of 12 (net 9.2) wells drilled or participated in for the final quarter. All of the operated wells were successful, which resulted in two (net 2.0) gas wells and nine (net 6.7) oil wells. The non-operated location was the only dry hole (net 0.55). Of the successful wells, seven are already on production with the balance in various stages of the tie-in process. As a result, even though there were major transportation restrictions due to a number of pipeline interruptions in December, Devlan still averaged 2,279 boe (6:1) for the month.
The Board of Directors has approved a 30 well drilling program for 2004 which is an 87% increase over last year's forecast. Management expects to revisit the budget after the winter drilling program is completed. Historically the Company has always elevated its expenditure program after the first six months to reflect its drilling successes. In 2003 an additional 12 wells were drilled in the last half of the year, a product of positive results and the availability of newly generated prospects.
"With an additional 135 (net 95) boed about to be tied in and 16 locations to be drilled in the first quarter alone, (predominantly all developmental), we expect to attain even better results than 2003" said Devlan president Martin Cheyne. "These aspirations for 2004 will be supported by our drilling successes and the strong commodity prices we are experiencing. Although the strong Canadian dollar has curtailed most budgets, we still intend to increase production annually by 25%".