Ocean Energy Halts Some International Activities
Ocean Energy Inc. will discontinue current exploratory activities on its blocks in the Arabian Sea offshore Pakistan and on Block 19 in the Lower Congo Basin offshore Angola. After satisfying contractual obligations, the decision will result in an approximate $76 million impairment for the quarter ending September 30, 2002 ($50 million after tax), of which $70 million will be non-cash. Ocean plans to continue activities on its other blocks in Angola, including the drilling of an exploratory well on Block 24 in the fourth quarter and acquisition of seismic data on Block 10 in early 2003.
"We are very fortunate to have an excellent inventory of prospects worldwide, and following our exploratory assessment of these two areas, we believe that Ocean's other opportunities offer greater economic potential," said James T. Hackett, Ocean Energy chairman, president and chief executive officer.
The company also adjusted its anticipated production volumes for the third quarter of 2002. The company now expects an eight percent increase over second quarter production to approximately 165,000 barrels of oil equivalent per day (BOEPD) in comparison to a previously announced mid-point of 170,000 BOEPD. The change primarily reflects the timing of first production on several high-rate completions in the Nansen, Boomvang and Zafiro developments. In addition, the rerouting of third-party pipelines, associated with platform abandonments, shut down production from a Gulf of Mexico shelf property for 10 days. As a result, Ocean now estimates that its production for 2002 will exceed 2001 levels by approximately six to eight percent.
"We are confident that our worldwide program will continue to achieve annual double-digit production growth for the next three years," continued Hackett, "although the timing of new deepwater production may vary from quarter to quarter."