Conoco Replaces 432 Percent of Production in 2001
Conoco and its equity affiliates added more than 1.2 billion barrels of oil equivalent (BOE), including syncrude, to the company's worldwide proved reserves in 2001, replacing 432 percent of the oil and natural gas the company produced during the year.
The company's 2001 year-end proved reserves increased to 3.58 billion BOE, including syncrude, up 35 percent from year-end 2000. International proved reserves -- which represent approximately 83 percent of Conoco's worldwide reserves -- were up 45 percent to 2.98 billion BOE.
Conoco's 2001 reserve additions largely came from the company's acquisition of Gulf Canada Resources Limited. Significant reserves were also added in the U.K., the U.S., Vietnam and Indonesia.
Conoco replaced 113 percent of production, excluding the reserves bought with the Gulf Canada acquisition and other acquisitions throughout the year, and the reserves sold as part of a disposition program designed to upgrade the company's portfolio and generate cash for debt repayment.
"These additions are the result of an outstanding exploration and business development program over the past few years, in combination with a disciplined and focused approach to acquisitions and dispositions in order to maximize the value of our portfolio," said Archie Dunham, Conoco's chairman and chief executive officer.
"Between 1997 and 2001, Conoco replaced an average of 246 percent of production, which is among the best in the industry," Dunham added.
"Conoco's 2001 production of 281 million BOE, which includes six months production from the former Gulf Canada, reflects a 17 percent increase over 2000. Natural gas production was up 19 percent, reaching 123.5 million BOE (741 billion cubic feet of natural gas), reflecting an ongoing effort to increase the percentage of natural gas in our production portfolio. Natural gas production rose from 35 percent of total production in 1997 to 44 percent in 2001," Dunham said.
"2001 yielded, for the fourth consecutive year, outstanding exploration results," said Rob McKee, Conoco's executive vice president of worldwide exploration and production. "Overall, we achieved a 37 percent exploration success rate on Conoco legacy assets. Seven out of 19 exploratory wells drilled during the year resulted in discoveries, one of which -- Sutu Vang in Vietnam -- is potentially significant with more than 100 MMBOE potential," McKee said.
"Our appraisal program in 2001 yielded a 100 percent success rate on Conoco legacy assets, and as a result we were able to sanction two fields last year -- the deepwater Gulf of Mexico Magnolia field and the Sutu Den field offshore Vietnam," added McKee.
In the North Sea, Conoco made five successful "snuggle" discoveries. "We have been very successful in the pursuit of prospects close to existing processing and transportation facilities," continued McKee. "In 2002, we will continue to maintain an active 'snuggle' exploration program with high value prospects being drilled in the U.K., Norway, the Netherlands, Western Canada, San Juan Basin and Indonesia."
Conoco has an exploration and appraisal program of more than 40 wells planned for 2002 at an estimated cost of $500 million in the deepwater Gulf of Mexico, Norway, the U.K., Vietnam, Malaysia, Indonesia, Nigeria, Venezuela, the Netherlands and Canada.