Remington Extends Two Gulf of Mexico Fields
Remington Oil & Gas
|Wednesday, January 23, 2002
West Cameron 170 - The West Cameron 170 #7 exploratory well, located in 36 feet of water, has been drilled to a total depth of 17,962 feet and production casing has been set. This well logged 104 feet of apparent oil and gas pay in multiple sands. A caisson structure will be installed over the well, and completion operations will immediately follow. Production from the #7 well is expected in the 2nd quarter 2002. This exploratory field extension well is located over one mile from the nearest production in the field. Remington owns a 42% working interest in this well. NEXEN Petroleum USA, Inc. operates West Cameron 170 and owns a 56% working interest in the #7 well. East Cameron 184 Field - Remington has concluded drilling operations on the East Cameron 179 #1 confirmation well. This well, located in 95 feet of water, was drilled to a depth of 12,054 feet and encountered 125 feet of apparent gas and oil pay in three sands. Logs indicate 70 feet of apparent pay in one continuous, high resistivity sand and 55 feet of apparent pay in two low resistivity sands. After production casing has been set, completion operations on this well and the initial field discovery well, East Cameron 184 #1, will commence. Platform installation is to immediately follow the completion of both wells. Production from this development is expected in late March 2002, approximately one month behind prior estimates, due to mechanical problems encountered while drilling the most recent well. Remington is operator of East Cameron Blocks 179, 184, and 185 with a 57.5% working interest in each. Magnum Hunter Resources, Inc. and Wiser Oil Company own 30% and 12.5%, respectively. Remington's near term offshore Gulf of Mexico drilling program includes the following wells: Eugene Island 302 A-2 (Development); Main Pass 232; Ship Shoal 164; West Cameron 347 and West Cameron 253 (Exploratory). The four exploratory tests will expose Remington to 160 BCFE of net unrisked resource potential. The company also intends to participate in two onshore wells located in South Texas. Remington will own between a 20 and 25% working interest in these wells. During the 4th quarter 2001, the company's production volumes are expected to be within the prior guidance at approximately 7.2 BCFE. Production for the year is anticipated to be approximately 28.8 BCFE, or approximately 43% above 2000 production levels. For the year 2002, production volumes are expected to increase at least 20% over 2001 levels from recent discoveries. Production commencement at West Cameron 417, South Marsh Island 93, and Eugene Island 397, is on schedule for the 2nd quarter of 2002 barring no unforeseen delays for adverse weather or mechanical problems. The company exited 2001 producing approximately 80 mmcfe/day and expects to exit the 2nd quarter 2002 at approximately 100 mmcfe/day. Remington has put in place a forward gas sale of 20 mmcf/day at $2.78 per mmbtu for six months beginning January 1, 2002. This forward sale covers approximately 33% of our current daily gas production. James A. Watt, President and Chief Executive Officer of the company stated, "We will now commence several high potential exploratory tests and finalize installation and completion operations on our recent discoveries. In spite of current and forecasted low commodity prices for 2002 we anticipate an active exploratory program to continue adding new reserves and value for our shareholders in 2002."