Burlington Says 3Q05 Production on Lower End of Guidance Range
Burlington Resources updated guidance on expected third-quarter production volumes, commodity price realizations and costs. The company's third-quarter earnings announcement on October 27 will report the final results and provide updated guidance for the fourth quarter and full year of 2005.
Burlington currently expects third-quarter 2005 daily production to fall within the lower portion of its previously announced guidance range of 2,800 to 3,000 million cubic feet of natural gas equivalent per day (MMcfed). The quarterly volumes will reflect the impact of production curtailments primarily resulting from storms in the Gulf of Mexico. Burlington has restored the majority of the 180 MMcfed of production that was curtailed immediately following Hurricane Rita, and is working aggressively to restore approximately 60 MMcfed, or 2 percent of the company's total production volume, that remains shut in at this time.
Also on a preliminary basis, average realized commodity prices for the third quarter, including results of hedging and wider-than-normal basis differentials for natural gas, are expected to range between $7 to $7.30 per thousand cubic feet for natural gas, $34 to $35 per barrel for natural gas liquids and $56 to $57 per barrel for crude oil.
The company expects its unit costs, when adjusted for expected production volumes, to remain within previously disclosed guidance ranges, with the exception of general and administrative expenses. These expenses, when compared to previous guidance, will include approximately $30 million in additional pretax costs related to the mark-to-market on a stock-based compensation program reflecting Burlington's share price at the end of the quarter.
Burlington has also made considerable humanitarian and operational contributions to relief efforts for hurricanes Katrina and Rita, including assisting affected employees and making donations through the Burlington Resources Foundation to key relief agencies involved in recovery work.
Bobby Shackouls, Burlington's chairman, president and chief
executive officer, said, "We are working to ensure the safety and well
being of our employees and neighbors in the areas impacted by these
two tragic storms. Secondly, we remain committed with the rest of our
industry to working with federal, state and local officials to restore
lost production and bring new sources to market in order to moderate
the extremely high energy prices being experienced by our fellow
Americans. And finally, we continue to seek long-term solutions to our
nation's growing energy requirements in a manner that is acceptable to
the majority of our citizens."
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