Meridian Resources Provides Operational Update
The Meridian Resource Corporation announced financial and operating results for the third quarter of 2001, meeting analysts' expectations and reflecting continued improvement over prior quarters of this fiscal year in the Company's financial and operational fundamentals. For the current period, the Company reported net revenues of $33.8 million ($0.63 per share) compared to $62.8 million ($0.94 per share) for the same period of 2000. Operating cash flow for the current quarter totaled $23.4 million ($0.43 per share) versus $42.2 million ($0.63 per share) for the same quarter of 2000. For the third quarter, earnings applicable to common shareholders totaled $1.2 million ($0.03 per share) compared to earnings of $25.4 million ($0.41 per share) for the third quarter of 2000. For the nine-month period ended September 30, 2001, revenues, operating cash flow and earnings all showed decreases compared to the same period of 2000. Revenues of $149.9 million ($2.65 per share) for the current period contrasted against $162.7 million ($2.49 per share) for the same nine months of 2000, contributing to a current nine-month cash flow of $99.1 million ($1.75 per share) versus $102 million ($1.56 per share) for the prior period. Earnings were $28.6 million ($0.53 per share) for the current nine months versus $49.6 million ($0.83 per share) for the same period of 2000 despite the inclusion of $18.5 million in tax charges against 2001 earnings versus no tax charges against earnings in 2000.
The Williams Land Company No. 1 well, located in the SW Donner prospect area of the North Turtle Bayou/South Ramos field, was drilled to a depth of 18,650 feet and encountered approximately 55 gross feet of oil pay (28 net feet) in a Rob-L sand at approximately 14,900 feet. The well has been completed and tested at a rate of 1,534 barrels of oil per day (BOPD) plus 887 thousand cubic feet of gas per day (Mcf/d) on a 12/64th inch choke with a flowing tubing pressure (FTP) of 5,654 pounds per square inch (psi). Shut in tubing pressure (SITP) was measured at 6,102 psi. The Company is presently installing surface equipment in anticipation of first sales during mid November. Meridian is the operator of the well and the field and owns a 90% working interest in the well.
The Lakeside SL 15223 No. 2 well in Cameron Parish, Louisiana has been drilled to a total depth of 17,757 feet and failed to encounter the Camerina sands found productive in the Lakeside No.1 well due to fault and stratigraphic implications associated with the well's crestal position on the structure. Restrictions on operations in the waterfowl refuge during the fall and winter seasons have resulted in the Company suspending operations on the site until after March 2002. Meridian and its partners are currently evaluating two additional locations north of the No. 2 well which are outside of the wildlife refuge area for additional exploration and development sites. Drilling operations on the first of these land locations are expected in first quarter 2002. Targeted sands for the wells include the Marg Howeii, Camerina and Miogyp sands. Meridian holds a 65.5% working in the field and is the operator.
The Hughes No. 1 well in the East Lake Arthur Field, in Jefferson Davis Parish, Louisiana, has completed the sidetrack operations and is preparing the well for completion in the lower Bol Mex 5 sand package. Electric logging operations have confirmed the original reports on the discovery well. The well's production facilities have been constructed and it is anticipated the well will be placed on production in the future. Meridian holds leases over approximately 2,300 acres in this highly prospective area. Additional wells in this area are anticipated to be drilled to develop the Bol Mex sands beginning in early 2002. Meridian is the operator and owns an approximately 90% working interest and a 65.5% net revenue interest in the well.
The Avoca No. 1 well located in Assumption Parish, Louisiana has recently been drilled. Meridian has filed with the State of Louisiana Department of Conservation a request that the well be an alternate unit well to the Company's Thibodaux No. 1 well. The hearing date has not been established and will be determinative of the ownership position of the respective parties participating in the well. If successful at the Conservation hearing, Meridian expects to place the well on production immediately thereafter and to evaluate re-completing the Thibodaux No. 1 well to the Operc "3" sand interval. The potential combined production from these two wells could add significantly to Meridian's daily production rate to levels achieved prior to the sale of all wells in the prior 18 months.