Spinnaker Increases Production by 40%
Production for the third quarter totaled 14.8 billion cubic feet of gas equivalent (Bcfe) or 161 million cubic feet of gas equivalent per day (MMcfged), and was a record for the Company. Production for the quarter increased 40% from second quarter levels and 4% from levels of one year ago. The Company's current net producing rate is approximately 190 MMcfged. This represents an increase of 23% and 19% from exit rates reported July 30, 2002 and one year ago, respectively.
Per unit lease operating expense (LOE) inclusive of severance taxes, workover expense and transportation expense was $0.35/thousand cubic feet of gas equivalent (Mcfe), identical to LOE for the first and second quarters.
The Company estimates that its net production was reduced by approximately 500 MMcfge during the third quarter as a result of Tropical Storms Fay and Isidore. Spinnaker now operates gross production of approximately 300 MMcfged.
The Company expects to produce 16.6 Bcfe or approximately 180 MMcfged in the fourth quarter, bringing full year production to previous guidance of 51.8 Bcfe (142 MMcfged) for 2002. It is estimated that fourth quarter production has been reduced approximately 0.8 Bcfe due to the effects of Hurricane Lili (in addition to the previously noted 0.5 Bcfe related to third quarter storms). Hurricane Lili did damage to several pipelines and facilities in which the Company has ownership. Most, but not all, of that damage has been repaired.
Full year 2003 production is estimated to be 50-57 Bcfe. This estimate includes proven volumes and some lower risk exploitation/exploration drilling.